Gold bounces from 11-month lows, tracks oil

By Lewa Pardomuan

SINGAPORE, Sept 10 (Reuters) - Gold advanced on Wednesday after a rebound in oil prices, which helped the metal resist selling pressure from speculators who had sent prices to their lowest in nearly a year.

Platinum tumbled to its weakest since March last year, with fears of falling demand for autocatalysts adding to the selling pressure. Silver was at its lowest level in nearly two years and palladium at its weakest since November 2005.

Spot gold rose to $778.70/779.90 an ounce, up 0.4 percent from $775.80/777.80 in late New York and was off an intraday low of $762.55 an ounce, its weakest since late October 2007.

Physical buying from jewellers also helped pluck gold from the lows, but dealers said sentiment had turned bearish after gold's failure to hold above the psychological level of $800.

"For gold to turn around, we willrequire a change of sentiment in the tradingenvironment. Gold is expected to trade between $750 and $820 in the short term," said William Kwan, bullion director at Gold Capital Management in Singapore.

Oil rebounded from a five-month low after OPEC agreed to a small but unexpected production cut that some analysts said showed their resolve to keep prices above $100 a barrel.

"I think we are seeing some market switching. This is very much a currency, oil play. I think $740 looks like a key level," said Mark Pervan, an ANZ senior commodity analyst in Melbourne.

"I think if it goes through $760, I think it could move to $740 very quickly and then there's no reason why it wouldn't test $700 an ounce within four or five weeks if we continue to see the strengthening of the dollar," he said.