* Platinum falls to fresh 6-1/2-year low
* Dollar firm; Asian stocks slide after China flash factory
PMI
(Rewrites with platinum move, adds trader comment)
By A. Ananthalakshmi
SINGAPORE, Sept 23 (Reuters) - Gold rose after two days of
losses on Wednesday as equities took a hit from weak Chinese
factory data, while platinum slid to a fresh 6-1/2-year low as
investors feared a drop in demand from the auto industry.
Platinum XPT= fell to $925.30 an ounce, its lowest since
January 2009, before recouping losses to trade up 0.3 percent at
$936.55 by 0722 GMT.
The metal has been hurt by news of Volkswagen (XETRA:VOWG) AG's
VOWG_p.DE falsification of U.S. vehicle emission tests as
investors believed it could affect demand for diesel cars.
Platinum is used in diesel catalysts. ID:nL5N11S052
"The white metal is still trading within a downward bear
channel dating back to mid 2014 and if recent developments in
base metals, U.S. dollar and automaker stock turmoil persist
there is certainly scope for platinum to test below $900," said
MKS Group trader Alex Thorndike.
If regulators uncover widespread violations across the
industry and environmentally conscious drivers in Europe switch
to gasoline, it could "reshape the picture" for platinum, said
Erica Rannestad, senior analyst, precious metals demand at GFMS.
ID:nL1N11S21N
The recent sell-off in platinum has added to a malaise that
has weighed on prices for the past year amid concerns about
weakening demand from top consumer China and surplus inventory
as investors have exited exchange-traded funds.
Gold XAU= rose 0.2 percent to $1,126.70 an ounce, after
losing 1.3 percent over the past two days.
Bullion had come under pressure earlier in the session as
the dollar jumped to its highest in nearly three weeks before
giving back some gains on expectations the Federal Reserve would
hike U.S. interest rates this year.
But a sell-off in equities due to concerns over the Chinese
economy provided support for gold towards the end of the Asian
session, traders said.
Asian stocks looked set for their biggest single-day fall in
a month on Wednesday after a private survey showed activity in
China's factory sector unexpectedly shrank to a 6-1/2-year low
in September. MKTS/GLOB
Gold's outlook, however, continues to be clouded by a
looming U.S. interest rate hike. The Fed stood pat on interest
rates last week but the U.S. central bank has also said it would
move to increase rates later this year.
Higher rates would dent demand for non-interest-paying gold,
while boosting the dollar. A stronger greenback makes
dollar-denominated gold more expensive for holders of other
currencies.
Inflows into SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, supported prices on Wednesday.
The fund's holdings rose 0.18 percent to 675.80 tonnes on
Tuesday, the first inflow in almost a month. GOL/ETF
PRICES AT 0722 GMT
Metal Last Change Pct chg
Spot gold 1126.7 2.1 0.19
Spot silver 14.78 0.06 0.41
Spot platinum 936.55 2.55 0.27
Spot palladium 620.22 14.72 2.43
Comex gold 1126.2 1.4 0.12
Comex silver 14.77 0.014 0.09
Euro 1.1141
DXY 96.266
COMEX gold and silver contracts show the
most active months