LONDON, Aug 4: Gold prices ticked up on Monday as a rebound in crude prices encouraged buying of the precious metal as a hedge against oil-led inflation.

Platinum extended losses in Europe on Monday after a weak session in Asia, as investors worried about the outlook for the automotive industry after monthly US car sales slipped to a 16-year low.

Around half of global platinum supply is used by the automotive industry in catalytic converters, so any slowdown in car manufacturing could have a major impact on demand.

Sister metal palladium was little changed at $363.50/371.50 an ounce from $364.00/372.00 late in New York.

In Asia, the most active contract on Tokyo platinum futures slid by its daily 300-yen limit to its weakest since late January as speculators sold their contracts.

If platinum falls to around $1,450, and palladium to $320, we might see some mines... starting to lose money, said Standard Bank analyst Walter de Wet. That is probably a short-run floor in prices.

The other big question is (whether) the market is still indeficit, he added. A lot of investors have got rid of platinum, and demand is also now falling behind supply.

London-based ETF Securities said its Physical Platinum ETF has seen outflows of over 42,000 ounces, or 11 per cent, over the last month.

Earlier this year platinum spiked up to an all-time high of $2,290 an ounce on fears a power shortage in major producer South Africa could seriously deepen the metal’s supply deficit this year.

Oil climbed as a tropical storm formed near the Gulf of Mexico, seat of key US oil installations, and as fresh violence broke out in Opec oil producer Nigeria.

The dollar came off a five-week high against the euro on the back of oil’s high, further supporting gold’s move.

The precious metal typically moves in the opposite direction to the US currency, as it is often bought as a hedge against dollar weakness.

In investment news, gold holdings of the world’s largest gold-backed exchange traded fund, the SPDR Gold Trust, edged up 0.1 per cent to 674.02 tons on Friday, the trust said.

Spot gold rose to $912.65/913.65 an ounce from $909.85/911.45 late in New York on Friday.—Reuters