PRECIOUS-Gold ends flat as stimulus fades, euro zone eyed

Wed Oct 10, 2012 3:52pm EDT

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Thurs.

 (Adds details, updates market activity)
    By Frank Tang
    NEW YORK, Oct 10 (Reuters) - Gold ended nearly flat on
Wednesday, as renewed fears about a worsening euro zone debt
crisis along with wider concern about the global economy
dampened the metal's allure as a traditional inflation hedge.
    Analysts said that some investors could take profits after
gold had climbed for four consecutive months prior to October.
The failure of recent rallies to break above $1,800 an ounce
also triggered technical pressure. 
    The metal reached an 11-month high on Friday on hopes that
the U.S. Federal Reserve, European Central Bank and other major
central banks would continue pumping money into the global
economy to stimulate growth, which has boosted gold's
inflation-hedge appeal.
    "Additional monetary policy easing in the United States and
other countries is no longer fresh news, and so we do not
anticipate further significant buying of gold based on monetary
policy accommodation alone," said James Steel, HSBC's metal
analyst.
    Spot gold was down 75 cents at $1,762.90 an ounce by
3:21 p.m. EDT (1921 GMT). Bullion was still within reach of
Friday's high of $1,795.69, which marked the loftiest price
since November.
    U.S. COMEX gold futures for December delivery settled
up 10 cents at $1,765.10, with trading volume on track to finish
sharply below average, preliminary Reuters data showed. 
    Silver climbed 0.5 percent to $34.01 an ounce,
boosted by better industrial-demand outlook as crude oil and
base metals recovered after their recent losses.
    Bullion was pressured after the International Monetary Fund
said the euro area's debt crisis was the main threat to growth,
and the risks to global financial stability had risen in the
last six months, leaving confidence "very fragile." 
 
    The market largely ignored the Federal Reserve's Beige book
report of anecdotal evidence that economic activity is still
expanding modestly in most regions though pockets of weakness
and strained labor markets remain a problem for some districts.
 
    Purchases of exchange-traded products (ETPs) reflected
investors' positive outlook for bullion in the long term.
Bullion backed ETPs rose to a record high on Oct. 9. 
   
    GOLD'S OUTLOOK BRIGHT
    A Reuters poll of 27 analysts released Wednesday showed they
remained bullish on bullion in the long term. Analysts
unanimously forecast a record high average price of $1,690.00 an
ounce in 2012, up a touch from an estimate of $1,685.00 at the
end of the second quarter and $1,765 suggested in January.
 
    Among platinum group metals that are mostly used as auto
catalytic converters, platinum fell on signs that industrial
unrest in South Africa, home to the largest platinum reserves,
was abating. 
    Spot platinum was down 0.6 percent on the day at
$1,668.74 per ounce, while palladium was down 0.5 percent
at $649 an ounce.
    Palladium also fell after data from China showed a
decline in vehicle sales in September versus the year earlier
period, the China Association of Automobile Manufacturers (CAAM)
said on Wednesday. 
  
 3:21 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1765.10   0.10   0.0  1758.50 1770.00  115,367
 US Silver DEC  34.109  0.124   0.4   33.745  34.190   35,376
 US Plat OCT   1676.70 -14.90  -0.9  1670.00 1688.30       16
 US Pall DEC    649.90  -8.30  -1.3   647.40  658.20    2,278
                                                               
 Gold          1762.90  -0.75   0.0  1757.63 1767.80         
 Silver         34.010  0.170   0.5   33.740  34.130
 Platinum      1668.74 -10.86  -0.6  1668.90 1685.24
 Palladium      649.00  -3.50  -0.5   650.50  655.00
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        122,731   170,691   174,029     16.14    0.12
 US Silver       39,868    52,970    56,739        35    7.00
 US Platinum      8,644    15,795     9,722      20.4    0.02
 US Palladium     2,346     4,863     4,836                  
                                                               
 
 (Additional reporting by Clare Hutchison, Amanda Cooper in
London, and Rujun Shen in Singapore; Editing by Leslie Gevirtz
and Marguerita Choy)
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