* Palladium on track for biggest jump since Dec. 2009
* Spot gold firms after 2 days of trading lower
* SPDR Gold Trust saw first inflow in nearly 1 month
* GRAPHIC: http://link.reuters.com/puw65w
(Updates prices; adds comment, graphic link, second byline, NEW
YORK dateline)
By Marcy Nicholson and Clara Denina
NEW YORK/LONDON, Sept 23 (Reuters) - Platinum XPT= fell to
a 6-1/2-year low on Wednesday, on fears about reduced demand
from the auto sector, where it is used in diesel catalysts to
clean up exhaust emissions, while palladium, used in gasoline
vehicles, surged 7 percent.
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.
ID:nL5N11S052 ID:nL1N11S21N
The price of palladium, the predominant metal used in
gasoline catalysts, soared on speculation that the Volkswagen
scandal could increase demand for gasoline vehicles, traders
said.
Spot platinum XPT= fell to its lowest since January 2009
at $924.50 an ounce, and was down 0.8 percent at $926.25 at 1:57
p.m. EDT (1757 GMT).
Palladium XPD= , on the other hand, surged 7.2 percent to
$649 an ounce, the highest since mid-July. It later pared gains
and was up 6.1 percent at $642.25 an ounce, on track for its
biggest jump since December 2009.
"Diesel, which predominately uses a platinum catalyst, may
be damaged as an option for car purchasers because of the
Volkswagen emissions scandal, which would conversely be a win
for palladium," said Ross Norman, chief executive for bullion
brokerage Sharps Pixley.
Norman added that he does not expect diesel vehicles to "go
away in a hurry" but that the concentration of platinum group
metals may need to be increased to achieve the correct emission
levels.
"The plunge in platinum prices suggests ... that platinum
devices simply can't meet today's increasingly rigorous
government standards for cutting diesel emissions," said Adrian
Ash, head of research at online dealer BullionVault.com.
"If that idea grows, palladium demand may benefit, if not
prices, as petrol engines fill the gap."
Gold firmed, following two days of losses, as the dollar
.DXY fell as much as 0.2 percent against a basket of leading
currencies, while weak Chinese factory data soured investor
appetite for risk.
Spot gold XAU= was up 0.6 percent at $1,131.53 an ounce,
while the U.S. gold futures contract for December delivery
GCv1 settled up 0.6 percent at $1,131.50 an ounce.
SPDR Gold Trust GLD , the world's largest gold-backed
exchange-traded fund, saw the first inflow in almost a month on
Tuesday, supporting prices. GOL/ETF
"There is some typical risk-off trade in gold ... but it
seems that investors are still very much reluctant to add
safe-havens to the portfolios," Julius Baer analyst Carsten
Menke said.
Silver XAG= was up 0.2 percent at $14.75 an ounce.
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Graphic showing platinum vs palladium prices http://link.reuters.com/puw65w
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