Sept. 9 (Bloomberg) -- Gold fell for a second day in London as crude oil retreated, eroding the appeal of the metal as a hedge against inflation. Platinum plunged to the lowest in more than a year.

Crude oil slid in New York after Saudi Arabian Oil Minister Ali al-Naimi said supplies were sufficient to meet demand, triggering a slump in commodities from copper to corn and wheat.

``Comments by Saudi-Arabia's oil minister al-Naimi that the oil market is well balanced indicate that OPEC is probably not following calls from Iran and Venezuela to cut production,'' said Peter Fertig, a consultant at Dresdner Kleinwort in Hainburg, Germany, in a report today. ``Thus, crude oil might head further down, which is negative for gold.''

Gold for immediate delivery fell $2.57, or 0.3 percent, to $799.73 an ounce as of 12:25 p.m. in London. Gold futures for December rose $1.3, or 0.2 percent, to $803.60 an ounce in electronic trading on the Comex division of the New York Mercantile Exchange.

``Seasonal demand in the physical market, coupled with stabilizing central bank holdings, should anchor the metal at current levels,'' Manqoba Madinane, a commodity analyst at Standard Bank Group Ltd. in Johannesburg, said in a report today. ``Primary support for gold is at $791.''

Rand Refinery Ltd., the world's largest gold refinery, last month said it ran out of South African Krugerrands after an ``unusually large'' order from a buyer in Switzerland.

Brokerage Gold and Silver Investments Ltd. said in an e- mailed statement today that its gold bullion sales and Perth Mint certificates, which are government-backed precious metal certificates, have gained more than fivefold in the eight months through August.

Increasing Interest

``We have seen a rising level of interest in gold as an investment in the U.K.,'' Matthew Graydon, a spokesman for the World Gold Council, said in the statement. ``The main drivers of interest in gold investment remain the same: geopolitics, the weakening U.S. dollar, stagflation and systemic risk -- all of which are important considerations to investors today.''

Gold fell to $799.75 an ounce in the morning ''fixing'' in London from $808.00 at the previous afternoon fixing. The fixing is conducted by telephone twice a day by five banks: Deutsche Bank AG, HSBC Holdings Ltd., Bank of Nova Scotia, Societe Generale SA and Barclays Plc.

Platinum Falls

Hedge-fund managers and other large speculators decreased their net-long positions in New York gold futures in the week ended Sept. 2, according to U.S. Commodity Futures Trading Commission data.

Speculative long positions, or bets prices will rise, outnumbered short positions by 93,191 contracts on the Comex division of the New York Mercantile Exchange, the commission said in its Commitments of Traders report on Sept. 5.

Platinum, used in auto catalysts, dropped as much as $58.50, or 4.4 percent, to $1,285 an ounce, the lowest since Sept. 7, 2007.

``Weak Euro zone economic growth expectations, coupled with the strengthening U.S. dollar, should keep investors on the sidelines,'' Madinane said.

The European Central Bank kept its main interest rate at 4.25 percent on Sept. 4 as inflation held at almost twice its ceiling, driven by higher energy prices. The bank cut its 2008 economic growth forecast to about 1.4 percent and its 2009 prediction to 1.2 percent.

Among other metals for immediate delivery, silver fell 12 cents, or 1 percent, to $11.97 an ounce and palladium slipped $11.75, or 4.5 percent, to $250.25 an ounce.

``Further weakness in platinum could trigger a move towards $240'' an ounce for palladium, James Moore, an analyst at TheBullionDesk.com in London, wrote in a report.

Platinum fell to $1,285 an ounce in the morning fixing in London from $1,376 at the previous afternoon fixing. Palladium declined to $250 an ounce, from $273.

To contact the reporter on this story: Marianne Stigset in Oslo at mstigset@bloomberg.net

Last Updated: September 9, 2008 08:29 EDT