PRECIOUS-Gold jumps more than 2 pct; still down for the week

Fri Apr 19, 2013 3:40am EDT

* Gold to range from $1,360-$1,405 -technicals
 
    * Coming Up: U.S. CFTC commitment of traders data; 1930 GMT

 (Updates prices, adds quotes)
    By Lewa Pardomuan
    SINGAPORE, April 19 (Reuters) - Gold rallied more than 2
percent on Friday as its rebound to  $1,400 an ounce spurred
technical buying, but bullion was still heading for a fourth
week of losses after a brutal sell-off shattered investors'
confidence.
    Gold has been caught in a tug-of-war between physical buyers
seeking bargains and wary investors cutting exposure to the
precious metal on nagging worries about central bank sales and
prospects of easing inflation.
    Gold hit a session low around $1,385 before gaining
strength to $1,414.30 by 0715 GMT, up $23.55. Dealers also noted
physical buying, even though prices had gained more than $100
since hitting a 2-year trough earlier this week.
    "Prices have suddenly jumped but I guess it's because gold
has broken the $1,400-level again. Technically, people are just
buying up again," said a physical dealer in Singapore.
    "Physical buying from Thailand is not that strong,
surprisingly. We are seeing demand from Indonesia and local
buyers, and a also little bit from India." 
    Gold investors are waiting for the 1930 GMT release of U.S.
CFTC data showing the latest trading by hedge fund and money
managers for more cues.
    The drop in prices ignited a spate of buying in gold coins,
nuggets and bars, sending premiums for gold bars to multi-month
highs in Asia. Buying also improved in top consumer India after
a lacklustre start. 
    "This gives us some confidence that as panic selling passes,
prices can rebound by $100 to $150 an ounce and trade in the
$1,400 to $1,550 range over the next 3 to 6 months," said Mark
Pervan, global head of commodity strategy at ANZ, referring to a
pickup in physical gold sales in India and China.  
    "A key factor to watch will be gold (exchange-traded fund)
ETF holdings, with a stabilisation in ETF holdings and then
fresh ETF buying to restore some of the lost confidence for
longer term gold investors." 
    
    U.S. gold futures for June delivery also staged a
modest rally, standing at $1,414.30 an ounce, up $21.80.
    Selling on COMEX, blamed on the outflows on gold-backed
ETFs, was responsible for a rout in the cash market. Spot gold
recorded its biggest ever daily fall in dollar terms on Monday,
catching gold bulls, speculators and veteran investors by
surprise.
    Holdings of the SPDR Gold Trust, the world's largest
gold-backed ETF, are at their lowest in three years, and there
was also speculation hedge fund manager John Paulson, a
prominent gold bull, might have liquidated his huge gold stake. 
  
    Gold has ignored tension in the Korean peninsula and
investors are increasingly convinced the U.S. Federal Reserve
will soon end its bullion-friendly bond buying programme, which
could ease inflationary pressure.
    It rallied to an 11-month high in October last year after
the Fed announced its third round of aggressive economic
stimulus, raising fears the central bank's money-printing to buy
assets would stoke inflation.
    Cyprus' plan to sell excess gold reserves to raise around
400 million euros ($523 million) also led to speculation other
indebted euro zone countries could follow suit.
    In other markets, Asian shares and oil prices climbed on
Friday, but more soft U.S. economic data and mixed U.S. earnings
sustained worries over global growth at the end of a volatile
week that began with a broad sharp sell-off. 
        
  Precious metals prices 0715 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1414.30   23.55   +1.69    -15.54
  Spot Silver        23.58    0.34   +1.46    -22.13
  Spot Platinum    1438.00   15.50   +1.09     -6.32
  Spot Palladium    677.00   10.50   +1.58     -2.17
  COMEX GOLD JUN3  1414.30   21.80   +1.57    -15.60        52929
  COMEX SILVER MAY3  23.56    0.31   +1.33    -22.08         9295
  Euro/Dollar       1.3062
  Dollar/Yen         98.77
 
  COMEX gold and silver contracts show the most active months
 
 
    
       

 (Additional reporting by Manolo Serapio Jr. Editing by Richard
Pullin and)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.