PRECIOUS-Gold near 3-1/2 month high on ECB hopes; platinum firm

Wed Aug 22, 2012 3:08am EDT

* Spot platinum rises to $1,511.99/oz, highest since early
May
    * Both spot gold, platinum poised to test 200-day moving
average
    * Spot gold may rise to $1,647/oz -technicals
    * Coming up: FOMC minutes, 1800 GMT

 (Adds graphic, comments; updates prices)
    By Rujun Shen
    SINGAPORE, Aug 22 (Reuters) - Gold was steady on Wednesday
near a 3-1/2 month high hit in the previous session as investors
remained hopeful the European Central Bank would soon take
action to contain the region's debt crisis.
    Platinum hit its highest level since early May as worries
about supply disruption at a mine of Lonmin, the world's No.3
platinum producer, lingered.    
    Recent media reports said the ECB has been mapping out
details to cap Spanish and Italian borrowing costs, easing
investor worries about the euro zone's festering problems,
though the bank tried to quash such speculation.
    The prospect of an ECB intervention pushed Spanish, Italian
and Portuguese yields down on Tuesday, and fuelled interest in
gold, a hedge against rampant cash printing by central banks.
 
    "We are getting sick and tired of the crisis. We want to get
rid of it," said Dominic Schnider, an analyst at UBS Wealth
Management.
    But investors may be carried away with hopes that upcoming
meetings in the following days among various European leaders
will result in convincing solutions to the crisis, but the risk
exists that the results of these meetings might still be
insufficient, said Ed Meir, analyst at INTL FCStone.
    "For the time being, it looks like investors are giving the
Europeans the benefit of the doubt that they indeed will pull
out the proverbial rabbit out of the hat," he said in a research
note.
    Later in the day, investors will seek clues on the Fed's
attitude towards a third round of quantitative easing in minutes
from the latest Federal Open Market Committee gathering.
    Spot gold was little changed at $1,638.49 an ounce by
0308 GMT, not far from a 3-1/2 month high of $1,641.20 hit in
the previous session.
    The U.S. gold futures contract for December delivery 
 edged down 0.1 percent to $1,641.20.
    Technical indicators suggest spot gold could rise to $1,647,
with any break above that level possibly propelling prices to
$1,664, Reuters market analyst Wang Tao said. 
    
    
    BACK TO LIFE
    Rising holdings of exchange-traded gold funds also reflect
improved sentiment. Holdings of the SPDR Gold Trust, the
world's biggest gold ETF, have been climbing since the end of
July and hit 1,278.962 tonnes by Aug. 21, the highest level
since early July. 
    Asia's physical gold market has sprung into life as prices
break out of their range since May.
    "There has been quite a bit of scrap selling coming out of
Thailand," said a Singapore-based dealer. "We are finally out of
the previous range and that will help stimulate more activity."
    Spot platinum gained 0.2 percent to $1,503, extending
gains to a fifth session. The metal is poised to cross above the
200-day moving average just below $1,515, for the first time
since early April.
    
   Precious metals prices 0308 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1638.49    0.60   +0.04      4.78
  Spot Silver        29.28   -0.04   -0.14      5.74
  Spot Platinum    1503.00    3.10   +0.21      7.90
  Spot Palladium    621.25    1.25   +0.20     -4.79
  COMEX GOLD DEC2  1641.20   -1.70   -0.10      4.75         5172
  COMEX SILVER SEP2  29.25   -0.18   -0.62      4.76         2203
  Euro/Dollar       1.2464
  Dollar/Yen         79.22
  COMEX gold and silver contracts show the most active months
 

 (Editing by Himani Sarkar)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.