* Fed's Lockhart says supports September rate hike -WSJ
* Platinum, palladium fall on oversupply, weak China demand
* U.S. dollar extends gains
(Rewrites throughout, updates prices; adds comment, second
byline, NEW YORK dateline)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Aug 4 (Reuters) - Gold retreated from
intraday highs on Tuesday as the dollar moved higher and a
voting member of the U.S. Federal Reserve said he is ready to
support an interest rate increase in September.
Platinum dropped to the lowest in 6-1/2 years and palladium
to the lowest since late-2012 on oversupply and sluggish auto
catalyst demand.
Gold prices fell from their highs after Atlanta Federal
Reserve President Dennis Lockhart said it would take
"significant deterioration" in the U.S. economy for him to not
support a rate increase in September, according to the Wall
Street Journal. ID:nL1N10F25P
"The more nervousness created about a September rate hike,
the worse it is for gold so that took the market as we go into
the close," said Bill O'Neill, co-founder of commodities
investment firm LOGIC Advisors in New Jersey.
"What the Fed is trying to do is to gradually prepare the
market for a rate hike."
Spot gold XAU= was up 0.2 percent at $1,087.61 an ounce at
3:10 p.m. EDT (1910 GMT), not far above the $1,077 it hit on
July 24, the lowest since February 2010.
U.S. gold futures for December delivery GCZ5 settled up
0.1 percent at $1,090.70 an ounce.
The dollar .DXY rose 0.4 percent against a basket of major
currencies. USD/
The next main data event is the release of U.S. non-farm
payrolls on Friday. ECONUS
An improving labor market could strengthen the dollar
further, indicating more price declines for non-interest bearing
gold, which fell nearly 7 percent in price in July.
"In the run-up to the first Fed rate hike it is going to be
difficult for gold to rally ... the metal has been in a
four-year bear market already and we can't see any sustained
driver that would take prices higher," Bank of America-Merrill
Lynch analyst Michael Widmer said.
The 19-commodity Thomson Reuters/Core Commodity CRB Index
.TRJCRB , a global price benchmark, rose from Monday's 12-year
low. COM/WRAP
The industrial precious metals remained weak, however.
Platinum XPT= dipped to its lowest since February 2009 at
$940.50 an ounce, while palladium XPD= hit nearly a three-year
low of $586.33 an ounce.
"What has hit palladium is that projections of car sales
into the future were (relying) on strong growth in China and
emerging markets," said Macquarie analyst Matthew Turner.
"But China is flatlining and many emerging markets are down
double-digit percentages. The outlook now looks a lot worse than
a year or so ago." ID:nS7N0XJ01D
Spot silver XAG= rose 0.3 percent to $14.52 an ounce.