LONDON, Sept 9: Gold came under pressure on Tuesday, struggling to stay above $800 an ounce level due to a strong dollar, but robust physical demand capped losses.

Platinum dropped more than 4 per cent on worries about demand for autocalysts due to poor car sales in key markets such as the United States, Japan and China, dragging sister metal palladium down 6.5 per cent.

Gold fell as low as 1 per cent to $794.00 an ounce and was at $799.80/800.80 an ounce down from $802.25/803.60 an ounce late in New York on Monday.

The dollar rose from around 1.4300 to around 1.4100 (against the euro) yesterday and is definitely not bullish for gold, said analyst Michael Widmer at Lehman Brothers.

The dollar hit a one-year high versus a basket of currencies, while the yen surged broadly on a flight to safety as investors concluded US action to save two top mortgage agencies did not alter fundamentals.

Bullion has fallen more than 18 per cent since hitting a four-month high of $987.75 an ounce in mid-July but stabilised around $800 an ounce -- still up 14 per cent from a year ago.

Gold was well below a lifetime high of $1,030.80 hit in March and within sight of a nine-month low of $773.90 struck in mid-August. Festive demand especially from main consumer India was likely to offer support at lower levels, dealers said.

We are approaching the Indian wedding season which is a period of strong physical demand, said John Meyer at Fairfax Investment Bank in a research note.

India is stepping up purchases during the festive season, which peaks in October with Diwali, the Hindu festival of lights. Dealers also saw purchases from jewellers in Indonesia ahead of the Eid -ul-Fitr holidays in October.

In industry news, exports of Italian jewellery are expected to improve after an estimated 30 per cent drop in volume in the first half to post a full-year fall of about 10 per cent, a senior industry expert said on Tuesday.

Spot platinum fell almost 5 per cent to $1,274.00 an ounce and was last at $1,287.50/1,307.50 from $1,337.00/1,357.00 late in New York on Monday, when it tumbled nearly 4 per cent.

Silver was at $12.02/12.08 from $12.05/12.11 while palladium at $248.50/256.50 from $258.00/266.00.—Reuters