PRECIOUS-Gold tests $1,750 as Greece buys more time

Wed Feb 8, 2012 2:25am EST

* Euro zone uncertainty to underpin gold sentiment
    * Gold-silver ratio drops to three-month low
    * Spot gold could fall to $1,729.51 - technicals
    * Coming Up: Greece's decision on rescue package terms

 (Adds details; updates prices)	
    By Rujun Shen	
    SINGAPORE, Feb 8 (Reuters) - Spot gold briefly rose
above a resistance level of $1,750 an ounce on Wednesday, as
investors waited for Greece to grind towards a deal on a rescue
package that it urgently needs after missing a string of
deadlines.	
    Athens tested investor's patience yet again on Tuesday by
postponing a decision on whether to accept austerity and reform
measures in exchange for a 130 billion euro ($172 billion)
bailout from the IMF and EU. 	
    Gold could face a short-term pullback if Greece strikes a
deal, as it may hurt the appeal of safe-haven assets, but in the
long run the lingering euro zone debt crisis is expected to
support sentiment in gold.	
    "If Greece were to agree on everything right away, I don't
think it would solve everything because they will still have to
implement the measures," said Jeremy Friesen, commodity
strategist at Societe Generale in Hong Kong.	
    "There are plenty of land mines left."	
    Spot gold edged up 0.3 percent to $1,749.29 an ounce
by 0650 GMT, after rallying 1.5 percent in the previous session.	
    U.S. gold gained 0.2 percent to $1,752.60.	
    Friesen said the uncertainty in Europe and the shadow it
casts on the global economy will buoy gold, as central banks
around the world are expected to promote accommodative monetary
policies to spur growth.	
    But the risk in Europe would make it difficult for other
commodities to stage a sustained rally over the next few months,
he added.	
    Technical analysis suggested spot gold could fall to
$1,729.51 an ounce during the day, Reuters market analyst Wang
Tao said. 	
    	
    The drop in bullion prices to below $1,710 in the previous
session prompted some physical buying in Asia, but purchasing
interest ebbed and scrap selling emerged as prices moved towards
$1,750, seen as a key resistance, dealers said.	
    Premiums on gold bars in Singapore stood around $1 an ounce
over London prices, said a Singapore-based dealer.	
    The gold-silver ratio, which measures how many ounces of
silver is needed to buy an ounce of gold, hovered above 51, its
lowest level in three months. 	
    For most part of 2011, the ratio was below 46, compared to a
near 30-year average of 64.	
    Spot silver inched up 0.2 percent to $34.20 an ounce,
leading the precious metals complex with a nearly 24-percent
gain so far this year.	
    Edward Meir, an analyst at INTL FCStone, said silver is
facing heavy resistance around $35.70, near a previous high hit
in late October.	
    "Should silver take out this level, we will be in a
technical breakout stage, possibly setting the complex up for a
push to the $40 mark," he wrote in a research note.	
    	
     Precious metals prices 0650 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1749.29    4.39   +0.25     11.86
  Spot Silver        34.20    0.06   +0.18     23.51
  Spot Platinum    1648.49    3.56   +0.22     18.34
  Spot Palladium    707.55    3.82   +0.54      8.44
  COMEX GOLD APR2  1752.60    4.20   +0.24     11.86        15941
  COMEX SILVER MAR2  34.25    0.05   +0.15     22.68         3557
  Euro/Dollar       1.3268
  Dollar/Yen         77.00
  COMEX gold and silver contracts show the most active months
 	
 (Editing by Himani Sarkar)