PRECIOUS-Gold edges up before ECB meets, PGMs near 17-mth highs

Thu Feb 7, 2013 2:47am EST

* Gold in neutral range-technicals 
    * Coming Up: U.S. Weekly jobless claims; 1330 GMT

 (Updates prices, quotes)
    By Lewa Pardomuan
    SINGAPORE, Feb 7 (Reuters) - Gold inched up on Thursday
ahead of a European Central Bank meeting that could set the tone
for the euro, while platinum and palladium held near their
highest levels in 17 months on hopes of a better economic
outlook.
    Bullion has been trading in narrow ranges so far this year
after signs of an improvement in the global economy prompted
some investors to shift to risky assets such as equities and
industrial metals.  
    Gold hit an intraday high at $1,680.95 as buying
interest resurfaced before the Lunar New Year break in Asia and
ahead of the ECB meeting. It later stood at $1,677.41 an ounce
by 0721 GMT, steady from the previous session. 
    The euro, which often dictates gold's movements, could fall
if ECB President Mario Draghi voices concerns about the
currency's recent sharp rise. 
    "We see a lot (of) leading economic indicators supporting
platinum and palladium. The economic outlook seems to be
brighter than most of us have expected," said Joyce Liu, an
investment analyst at Phillip Futures in Singapore.
    "Gold is very much dependent on the outcome of the ECB. I
don't think today they will give us a clear indication whether
the euro is indeed overvalued. If they try to weaken the euro
because the economy hasn't bottomed out, then in that case, it's
possible gold may go up a bit."
    Platinum was up $3.76 an ounce at $1,736.50 after    
   rising to $1,740 on Wednesday, its strongest since September
2011. Palladium was little changed at $761.00 an ounce
after hitting a high of $769.50 in the previous session, also
its peak since September 2011.
    Both metals, which are used in jewellery and auto catalysts,
have gained on an improving economic outlook and after mining
disruptions in South Africa, as well as a drop in supply from
Russia, triggered fears of a deficit.
    U.S. gold futures were barely changed at $1,678.30  
an ounce, but a weaker Japanese yen against the dollar sent gold
futures on Tokyo Commodity Exchange (TOCOM) to another record at
5,081 yen a gram. 
  
     
     Shares and the euro paused from recent gains on Thursday,
as investors awaited the ECB's policy meeting. 
     None of the 75 economists surveyed in a Reuters poll last
week forecast a cut in rates from their record low of 0.75
percent on Thursday. The poll suggested the ECB would not change
its rates until at least July 2014. 
    "There's a bit of buying from jewellers but a small amount
of purchasing has already pushed up the market because volumes
are light," said a physical dealer in Hong Kong. 
    A weak yen also lifted platinum futures on TOCOM, with the
most active December contract jumping to its highest
since early 2010 at 5,299 yen a gram.  
    With the Bank of Japan committed to open-ended asset
purchases from 2014 and aiming for a 2 percent inflation target,
pressure on the yen is likely to continue, market participants
said. 
    "In Japan, there's technical buying of platinum and
palladium because the yen has depreciated so much. It has
triggered short-covering. We don't see much buying of platinum
here," said the physical dealer in Hong Kong.
    "Gold is stuck in a big range of $1,650 to $1,700. We heard
that people are selling gold and buying stocks in the euro zone.
Europe is more stable after many years of struggle, and people
are ready to enter the stock markets." 
    Premiums for gold bars in Hong Kong eased to $1 to $1.50 an
ounce to the spot London price from as high as $1.70 last week
as physical activity began to slow down ahead of the long Lunar
New Year break. 
    China's gold production rose for a sixth consecutive year to
hit a record 403 tonnes in 2012, keeping its ranking as the
world's largest bullion producer, the Shanghai Securities News
said on Thursday. 
      
  Precious metals prices 0721 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1677.41    0.30   +0.02      0.17
  Spot Silver        31.76   -0.05   -0.16      4.89
  Spot Platinum    1736.50    3.76   +0.22     13.13
  Spot Palladium    761.00    0.50   +0.07      9.97
  COMEX GOLD APR3  1678.30   -0.50   -0.03      0.15        13360
  COMEX SILVER MAR3  31.79   -0.09   -0.29      5.14         2976
  Euro/Dollar       1.3534
  Dollar/Yen         93.64
 
  COMEX gold and silver contracts show the most active months
 
    
    
    

 (Editing by Clarence Fernandez and Daniel Magnowski)