PRECIOUS-Gold up on Japan stimulus, U.S. stocks at 5-year high

Tue Jan 22, 2013 4:13pm EST

* Gold faces technical resistance between $1,690-1,700
    * Benefits by diversification as S&P overbought on charts
    * Further price gains may trigger options-related buying
    * US Fed Housing Finance Agency house price index out Wed.

 (Adds market details, updates prices)
    By Frank Tang
    NEW YORK, Jan 22 (Reuters) - Gold rose on Tuesday as the
Bank of Japan's pledge to launch an economic stimulus effort and
a five-year high in U.S. equities prompted nervous investors to
buy gold.
    The metal rose for a second day after the Bank of Japan said
it would switch to an open-ended commitment to buying assets
next year and double its inflation target to 2 percent in its
most determined effort to boost its stagnant economy.
 
    Bullion has still failed to close above strong technical
resistance near its 50-day moving average at $1,690 an ounce as
well as the $1,700 mark, even though it had been testing them in
the last several sessions.
    "We've seen quite a bit of selling pressure that's coming at
these levels. As S&P and stocks get into this overbought
territory, the uncertainty is helping drive money back into
precious metals as a safe haven," said Tom Power, senior
commodities broker at brokerage RJ O'Brien.     
    U.S. stocks mostly edged up on Tuesday after ending last
week at five-year highs, but gains were limited with investors
showing caution as the earnings season picks up speed. On
charts, the S&P 500 index's 14-day relative strength
index (RSI) rose to near an overbought 70, hovering near its
highest since September 2012.
    Spot gold was up 0.1 percent at $1,691.24 an ounce by
3:29 p.m. EST (2029 GMT). Spot gold has not broken above $1,700
since Dec. 18.
    U.S. gold futures for February delivery settled up
$6.20 at $1,693.20 an ounce.
    Trading volume, which included turnover from Monday's U.S.
Martin Luther King Jr. holiday, was about 10 percent above its
250-day average, preliminary Reuters data showed.
    Traders were monitoring February COMEX options ahead of
their expiration on Jan. 28 following a strong rise in open
interest recorded in call options at the $1,710 strike. 
    (Graphic: link.reuters.com/gym45t)
    A further increase in gold prices above the popular call
strike prices at $1,700 and $1,710 could trigger options-related
buying and additional buy-stops, analysts said.
    Spot silver rose 0.7 percent to $32.20 an ounce. 

    INDIA IMPORT DUTIES, REUTERS POLLS
    The gold market has for now ignored news that India more
than doubled the import duty on gold alloy on Tuesday. The move
comes on the heels of a tariff increase for refined gold, as New
Delhi tries to curb demand in the world's biggest bullion
importer and rein in a record current account deficit.
 
    A Reuters poll of 37 analysts showed gold could test record
average highs of $1,775 and $1,780 in 2013 and 2014
respectively, but suggested its 12-year long bull run might be
reaching a plateau. 
    Spot platinum was up 1 percent at $1,689.49 an ounce,
while spot palladium rose 1.2 percent to $723.72 an ounce.
    The platinum group metals have been underpinned by worries
about widening deficits on the back of last week's news of
output cuts in South Africa and hopes for an improvement in
global demand.
    Analysts forecast an average palladium price of $745
an ounce for 2013, 16 percent above last year's average of $641
an ounce and an average $1,700 an ounce for platinum, up
10 percent from 2012's average $1,546
 3:29 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold FEB   1693.20   6.20   0.4  1684.80 1695.90  154,731
 US Silver MAR  32.177  0.245   0.8   31.815  32.365   42,303
 US Plat APR   1698.50  24.50   1.5  1666.60 1700.00   14,599
 US Pall MAR    729.90   7.15   1.0   714.25  732.50    4,683
                                                              
 Gold          1691.24   1.69   0.1  1687.33 1695.76         
 Silver         32.200  0.210   0.7   31.840  32.340
 Platinum      1689.49  16.00   1.0  1679.75 1695.50
 Palladium      723.72   8.72   1.2   719.25  730.00
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        187,197   149,071   174,486      13.2   -1.37
 US Silver       46,805    42,242    53,316     22.09   -1.38
 US Platinum     14,685    16,108    10,772     18.13   -0.19
 US Palladium     4,744     3,221     4,806                  
                                                              
 
 (Additional reporting by Jan Harvey and Clara Denina in London;
Editing by Bob Burgdorfer and Andre Grenon)
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