* Fed seen cutting rates by at least 50 bps * Dollar softer vs euro but lifts from lows on risk aversion * Oil climbs on hopes of U.S., Japanese rate cuts (Recasts, adds comment, changes dateline, pvs SINGAPORE) By Jan Harvey LONDON, Oct 29 (Reuters) - Gold marked time in Europe on Wednesday as traders awaited the Federal Reserve's interest rates decision later in the day, but platinum slipped sharply on demand fears. Spot gold was quoted at $748.80/751.30 an ounce at 1044 GMT, little changed from $744.30 in late New York trade on Tuesday. "We have the Federal Open Market Committee decision later in the day, and there is a lot of speculation of a cut," said Afshin Nabavi, head of trading at MKS Finance. "I don't think we are going to see huge movements today until we have this news." The dollar weakened a touch against the euro ahead of the interest rates decision of the FOMC later in the session, but lifted from lows as risk aversion grew. A reduction in rates is widely expected, but the scope of the cut is uncertain. "After a 66 percent probability of a 50 basis point rate cut yesterday, interest rate futures now pencil in 62 percent - which demonstrates the uncertainty of financial market participants," said Standard Bank analyst Manqoba Madinane. "This could keep the greenback on an uncertain path, which could see precious metals climb." The other main external driver of gold, oil, rose by more than $2 a barrel at its session peak and held above $64 a barrel, as stock markets rallied on bargain hunting and hopes for interest rate cuts in the United States and Japan. Firmer crude typically benefits gold, which is often bought as a hedge against oil-led inflation. Rising oil prices also tend to boost interest in commodities as a whole. Sentiment towards the asset class was also boosted by a recovery in equity markets after sharp losses in recent days, analysts said. European shares rose 4 percent in early trade, after big rallies in U.S. and Asian stocks. "The recent movements in both the equity and currency markets suggest some risk appetite is beginning the return," said James Moore, an analyst at TheBullionDesk.com. "This, coupled with the fact gold is considerably lower than at the start of the year and investors may look to further diversify their asset holdings, given recent events, may allow gold to begin recouping some of its losses." Among other precious metals, platinum resumed its downward trajectory, diving more than 6 percent in early trade as investors worried about the outlook for demand from carmakers. Buying of the metal for use in catalytic converters accounts for more than half of global platinum demand, and reports of production cutbacks and falling sales among car manufacturers have wiped 65 percent from the metal's value since March. However, analysts say the fall may have been overdone. "There is little downside risk left in the platinum group metals sector since PGM metal prices are sufficiently low that supply is likely to be removed from the market," said investment bank Nomura in a research note. "Fears of a steep decline in global auto sales and hence autocatalyst demand, in view of a global recession, are already priced in to the extreme," it added. Spot platinum fell to a session low of $755.50 an ounce, before recovering to trade at $800/830 from $809.00. Palladium was at $183/193 from $176, having touched a high of $186 on speculation the sell-off in the metal was overdone. Spot silver was at $9.24/9.34 against $9.16. (Reporting by Jan Harvey; editing by Peter Blackburn)

Source