SINGAPORE: Gold gained more than 2 percent on Tuesday on high oil prices and a firmer euro, recovering from its biggest two-day decline since early 1983, but a rally in stock markets could cap gains. Not to be outdone, platinum surged 6 percent to a two-week high, with Tokyo futures rising sharply after traders there returned from a long weekend. Gold was at $846.70 an ounce, up $15.90 from the New York notional close, having hit an intraday high of $850.00 an ounce. It had dropped to $821 on Monday, its weakest since Oct. 3. "The dollar is much lower today and I guess it's still on a bit of a spillover weakness from yesterday," said Adriah Koh, analyst at Phillip Futures in Singapore. "In the near term, gold's support will probably come in around the $820 region and a break below these levels could bring us to the $800s and possibly the $780 supports," he said. Gold, which struck a record at $1,030.80 in March, traded around $800 in September. It hit a two-month high of $931 on Friday on a weak dollar before tumbling to $823.50 as investors sought cash to cover margin calls from losses in equities. "There's good TOCOM-related buying. I mean the Japanese come back after a holiday and they just want to buy something," said a dealer in Hong Kong, referring to Tokyo's precious metals futures. Oil rose above $83 a barrel after a concerted effort by governments to shore up the banking sector gave hope the current financial crisis may ease. The Nikkei average rallied more than 13 percent on Tuesday, more than making up for its worst one-day loss since the 1987 stock market crash. The euro rose around 0.5 percent to $1.3643. In addition to getting support from firm gold and heavy buying from Japanese speculators after a weekend holiday, hopes for an easing of the credit crisis and reduced fears of recession pushed up platinum to its strongest in two weeks at $1,040. By 0225 GMT platinum was at $1,032.00 ounce, up $53.50 from New York's notional close. The metal was well still below a record high of $2,290 struck in March, hit by heavy selling on fears of falling demand for autocatalysts, which account for more than 60 percent of global demand. "I think it really pans down to how the economy is going to do. That will in turn affect the auto industry and affect sentiments on platinum," said Koh of Phillip Futures. New York gold futures rose $6.0 an ounce to $848.5 an ounce on safe-haven buying.

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