PRECIOUS-Gold slightly lower after weak U.S. consumer data

Fri Jan 18, 2013 4:05pm EST

* Gold eases after U.S. consumer data

* Spot gold still finds technical resistance at $1,696 and $1,700

* Platinum, palladium consolidate gains on profit-taking (Updates throughout, adds prices)

By Clara Denina

LONDON, Jan 18 (Reuters) - Gold prices were slightly lower on Friday as weak U.S. consumer sentiment data offset earlier strength following positive economic data from China, the world's second-biggest economy.

Gold pushed to a high of $1,694.90 in early trade, close to the previous session's one-month peak, but retreated ahead of the long U.S. holiday weekend after U.S. data showed consumer sentiment at its lowest in more than a year.

Equity markets and oil prices rebounded after U.S. House Republican leaders said they would seek to break a government budget impasse next week.

Platinum and palladium declined as players exited positions following recent gains.

Spot gold was at $1,685.44 an ounce at 3:40 p.m. EDT (2040 GMT) down from $1,687.26. It notched a weekly rise of 1.3 percent, its biggest in nearly two months, after hitting a one-month high of $1,695.56 on Thursday.

Earlier the metal had been lifted by renewed physical demand in China ahead of the New Year in February and after better-than-forecast Chinese GDP data.

"For gold, we had some good physical demand from Asia, particularly China, after better-than-expected GDP data," HSBC analyst Howard Wen said. "We expect physical buying to pick up ahead of the Chinese New Year on Feb. 10."

Positive physical demand had also been seen elsewhere, with the swap rate for delivery in Zurich versus London firmly in positive territory, suggesting strong physical offtake and subdued scrap supply, broker UBS said in a note.

Prices were hovering just below their 50-day moving average at $1,696, which represents a technical resistance level along with the psychological mark of $1,700, according to analysts who study past price patterns to determine the future direction of trade.

"There is some technical resistance at that $1,700 level, and gold has to break above that to move higher," HSBC's Wen said.

In the longer term, expectations that the U.S. Federal Reserve would continue its monetary stimulus and concerns about U.S. fiscal conditions will keep gold attractive as a hedge against inflation and uncertainty, market participants said.

PGMs LOWER

Platinum and palladium were down following their rally to multi-month highs earlier this week. Spot platinum fell 1.5 percent to $1,663.74 an ounce but was still on course to rise for a third week, by 2.1 percent.

Spot palladium fell 0.52 percent to $718.97 an ounce, having earlier hit a 16-month high of $730.47.

Platinum group metals were underpinned by threats to South African supply and by the positive Chinese GDP data, which supported expectations that demand from carmakers, the biggest consumers of the platinum group metals, will improve.

Platinum hit a three-month high of $1,701.50 on Thursday after rising throughout the week on supply concerns from leading producer South Africa, where number one platinum miner Anglo American Platinum announced cutbacks.

"The market seems to have discounted the impact of the Amplats' announcement," MKS Finance Vice President Bernard Sin said.

Trading in the two metals was also affected by high levels in Comex long positions.

"Comex positions for PGMs are at record levels, and it's a question of how much longer they can go, and that's one of the main reasons why the metals are down today," HSBC's Wen said.

Spot silver rose to a one-month high of $32.11, on course for a 4.6 percent weekly gain. It was last seen at $31.84, up 0.38 percent.

The U.S. Mint suspended sales of its 2013 American Eagle silver bullion coins after running out of stock due to soaring investor demand for the newly minted coins in the first two weeks of the year until the week of Jan. 28. (Additional reporting by Josephine Mason; Editing by Jan Harvey, Jane Baird and Leslie Gevirtz)

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