PRECIOUS-Gold holds near 11-month high on Spain caution

Wed Oct 3, 2012 2:58am EDT

* Gold consolidates as investors eye more cbank moves, US
data
    * Spot gold may fall to $1,737.50/oz -technicals
    * Coming up: U.S. ADP employment report; 1215 GMT

 (Adds details; updates prices)
    By Rujun Shen
    SINGAPORE, Oct 3 (Reuters) - Gold held near an 11-month high
on Wednesday, as uncertainty over Spain's bailout plan kept
investors on their toes while they wait for a key U.S. job
market report to shed light on the effectiveness of the latest
stimulus measures.
    Gold barely moved from the end of last week after posting a
fourth straight month of gains in September, spurred by the
aggressive stimulus measures of central banks, including the
U.S. Federal Reserve and European Central Bank.
    But the momentum has fizzled in the absence of a fresh
catalyst. Investors are eyeing Spain, now the centre of the euro
zone debt crisis, after the country's Prime Minister Mariano
Rajoy denied a Reuters report of an imminent request for
bailout.  
    "The real challenges will again drive the market," said
Jeremy Friesen, a commodity strategist at Societe Generale in
Hong Kong. 
    "We are going through a bit of a consolidation period until
we see what happens. My suspicion is that we'll get more
monetary policy responses from other central banks as the Fed
programme kicks off and the ECB programme starts, probably by
the end of this month. That's bullish for commodities like
gold."
    Gold is forecast to reach an average of $1,800 an ounce in
the first quarter of 2013 as a result, he added.
    Spot gold was little changed at $1,772.69 an ounce by
0624 GMT. It hit $1,791.20 this week, its highest level since
last November.
    U.S. gold traded nearly flat at $1,775.10.
    Data from China and Australia showing further weakness in
those economies added to expectations for more action from
central banks, after Australia's surprise rate cut on Tuesday.
  
    The dollar index rose as the global outlook darkened,
weighing on commodities priced in the greenback by making them
more expensive for buyers holding other currencies.    
    Technical analysis suggested that spot gold could fall to
$1,737.50 an ounce during the day, Reuters market analyst Wang
Tao said.    
    
    Trade was thin as key player China is closed for the entire
week for a public holiday, and investors turned cautious ahead
of the U.S. job market report due on Friday.
    Job growth is likely to have improved only slightly in
September as businesses remained cautious out of fear a sharp
tightening of the government's budget could deliver a big blow
to the economic recovery early next year. 
    Elsewhere in Asia, the sale of physical material from
Indonesia ebbed after rupiah-priced gold hit a record high
earlier in the week, dealers said.
    "There was much selling earlier and now it's drying up
slowly," said a dealer based in Singapore.
    Anglo American Platinum, the world's top platinum
producer, warned on Tuesday that security had worsened at its
strike-hit South African mines as several thousand gold miners
rallied over pay in the dispute-plagued industry.
 
    Strong U.S. auto sales data helped platinum group metals,
widely used in making autocatalysts. Sales last month posted
their best showing in 4-1/2 years, helped by cheap financing,
rising consumer confidence and a major rebound by Toyota Motor
Corp. 
    Spot platinum was little changed at $1,667.99 and
spot palladium slipped 0.6 percent to $643.10.
    
      Precious metals prices 0624 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1772.69   -1.45   -0.08     13.36
  Spot Silver        34.60    0.01   +0.03     24.95
  Spot Platinum    1667.99   -1.01   -0.06     19.74
  Spot Palladium    643.10   -4.10   -0.63     -1.44
  COMEX GOLD DEC2  1775.10   -0.50   -0.03     13.29         9294
  COMEX SILVER DEC2  34.68    0.01   +0.02     24.22         2573
  Euro/Dollar       1.2890
  Dollar/Yen         78.24
  COMEX gold and silver contracts show the most active months
 
 (Editing by Himani Sarkar)
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