Gold steady around $800, platinum near record

Thu Dec 20, 2007 2:01am EST

(Adds closing in Tokyo)

Lewa Pardomuan

SINGAPORE, Dec 20 (Reuters) - Gold was steady around $800
an ounce on Thursday despite a firming U.S. dollar, while
platinum dropped but held near a record high on supply
concerns.

Thin market conditions meant platinum was prone to sharp
fluctuations after it hit an all-time high of $1,519 an ounce
on Tuesday on worries of a likely market deficit in 2008.

Spot gold rose as high as $803 an ounce before
slipping to $800.00/800.80 an ounce, down from $801.10/801.80
late in New York on Wednesday.

Gold was likely to trade in a volatile $780 and $820 range
until the end of the year, said some dealers, but may challenge
last month's 28-year high when players return from holidays in
early 2008.

"Given the movements in the U.S. dollar in the past week, I
actually think the gold price is surprisingly resilient," said
David Moore, a commodity analyst at the Commonwealth Bank of
Australia in Sydney.

"One of the key supports, which you know is the fragility
of the U.S. dollar, has been less apparent," he said.

Expectations of further U.S. rate cuts, record-high crude
oil CLc1 and uncertainty in the U.S. credit market propelled
gold to above $845 last month -- a whisker away from the record
peak of $850 hit in 1980.

"Many have already taken their Christmas holidays. I would
expect the situation to remain like this until the end of the
year. I would say $790 and $815 is the range for the rest of
the year," Peter Tse, a dealer at Scotia Mocatta in Hong Kong,
said.

The dollar eased to 113.19 yen but stayed in a range
of 113.60 yen hit last week for the first time since early
November, aided by short covering before investors close their
books at the end of the year.

The euro hardly moved at $1.4385 , having
fallen to $1.4325 the previous day, its lowest since late
October. A firmer dollar makes dollar-priced gold more
expensive for holders of other currencies.

Platinum hit a high of $1,515 an ounce but then
dropped to $1,504/1,509 an ounce, down from $1,516/1,521 in New
York on Wednesday.

Johnson Matthey (JMAT.L: Quote, Profile, Research), the world's main platinum refiner
and fabricator, said in November the market would change course
in 2007 and see a deficit of 265,000 ounces. It had a surplus
of 65,000 ounces in 2006 after seven successive years of
deficits.

Platinum was bolstered by a rising lease rate, triggered by
buying from commodity funds and banks.

Tokyo dealers said investments banks appeared to have
tapped the lease market because they wanted to avoid holding
short positions in platinum at times when credit concerns
stayed in the financial market.

Recent strength in Japanese platinum futures <0#JPL:>,
which are in a steep backwardation, provided overall support.
The most active December 2008 contract ended 16 yen per gram
lower at 5,245 yen after hitting a high of 5,282 yen.

Palladium fell to $352/356 an ounce from $355/360 in
New York. Silver edged down to $14.03/14.08 an ounce
from $14.09/14.14 late in New York.
Precious metals prices at 0642 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 800.30 -1.60 -0.20 25.89
Spot Silver 14.04 -0.07 -0.50 9.26
Spot Platinum 1505.00 -11.00 -0.73 32.95
Spot Palladium 352.00 0.00 +0.00 6.02
TOCOM Gold 2937.00 -8.00 -0.27 20.12
45013
TOCOM Platinum 5245.00 -16.00 -0.30 23.30
39722
TOCOM Silver 516.80 0.90 +0.17 4.76
786
TOCOM Palladium 1307.00 -20.00 -1.51 4.14
875
Euro/Dollar 1.4369
Dollar/Yen 113.20
TOCOM prices in yen per gram, except TOCOM silver which is
priced in yen per 10 grams. Spot prices in $ per ounce.

(Additional reporting by Chikafumi Hodo in Tokyo; Editing
by Michael Urquhart)