SINGAPORE, Oct 28 (Reuters) - Gold was little changed on Tuesday as a rallying U.S. dollar and sliding equity markets erased modest early gains, with traders looking next to an expected U.S. interest rate cut and economic data for direction.
Platinum held near 5-year lows on worries about falling demand for autocatalysts after automakers cut output. Honda Motor Co, Japan's second-largest carmaker, said on Tuesday it would cut output of its Civic compact in the U.K. from December to meet falling demand in Europe.
Gold slipped $2.25 an ounce to $727.35 an ounce, off an earlier intraday high of $735 an ounce. The metal fell to a session low of $706.10 on Monday on heavy fund selling, not far from the 13-month low of $680.80 it touched last Friday.
'I am a bit neutral with a slight downward bias on gold. The dollar is still on a strong rally while euro and the pound are still on a downward slide,' said Adrian Koh, analyst at Phillip Futures in Singapore.
'I guess this week, the focus will also be on the Fed meeting,' said Koh, who expected gold to trade in a range of between $700 and $750 an ounce.
Gold has fallen as much as 27 percent since touching a two-month high of $931 on Oct. 10 after losses in equity markets forced investors to cash in, with falling oil prices and a surging dollar adding to the selling pressure, overshadowing its potential appeal as a safe haven in the financial storm.
Bullion was well below a record high of $1,030.80 hit in March.
The euro dropped 1.0 percent to $1.2370, having fallen as low as $1.2329 on EBS. Dealers watched movements in the dollar amid expectations the Federal Reserve will lower interest rates at its two-day meeting starting on Tuesday..
Thursday's third-quarter U.S. GDP data -- expected to show the economy contracted by 0.5 percent -- could also guide precious metals as fears of a global recession escalate.
The Nikkei slipped below 7,000 for the first time in 26 years, but was slightly higher by midday.
'We saw some short covering after the market ended below $745 during New York trading but sell-back from the Japanese later emerged,' said a dealer in Hong Kong.
'I guess trading range will still be the same at $710 to $750. Platinum did move up a bit but it lacked strength to sustain the gains,' he said.
Platinum was trading at $769.00 ounce, down $3.50 from New York's notional close on Monday, when it fell as low as $732.50 an ounce. Platinum has lost almost a quarter of its value since spiking to a lifetime high of $2,290 in March.
The automotive sector, which accounts for around half of all platinum demand, has been hit hard by the prospect of recession.
Weaker oil prices also put pressure on platinum. U.S. crude futures fell for a third day to below $63 a barrel as global recession concerns continued to dent demand.
New York gold futures fell $13.6 an ounce to $729.3.
Precious metals prices at 0305 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 727.35 -2.25 -0.31 -12.65
Spot Silver 9.04 0.03 +0.33 -38.79
Spot Platinum 769.00 -3.50 -0.45 -49.41
Spot Palladium 167.50 0.00 +0.00 -54.48
TOCOM Gold 2159.00 49.00 +2.32 -29.44 28496
TOCOM Platinum 2325.00 22.00 +0.96 -56.45 6243
TOCOM Silver 270.30 10.80 +4.16 -50.04 446
TOCOM Palladium 529.00 21.00 +4.13 -60.84 110
Euro/Dollar 1.2413
Dollar/Yen 93.24
TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.
