PRECIOUS-Gold rebounds 1 pct but outlook clouded by ETFs, dollar

Wed Apr 24, 2013 2:14am EDT

* Gold to retrace to $1,394 -technicals 
    * Coming Up: U.S. durable goods orders; 1230 GMT

 (Updates prices, adds quotes)
    By Lewa Pardomuan
    SINGAPORE, April 24 (Reuters) - Gold rose more than 1
percent on Wednesday on bargain-hunting after a drop in the
previous session, but pressure from a firm U.S. dollar, strong
equities and daily falls in the holdings of exchange-traded
funds look set to cap prices.
    Although demand for gold bars, coins, nuggets and other
products has surged in Asia after prices plunged to their
weakest in more than two years, investor confidence is still
reeling after bullion's spectacular fall.
    "Good physical demand in China or in Hong Kong supports
gold, but sentiment is still bearish," said Peter Fung, head of
dealing at Wing Fung Precious Metals in Hong Kong.
    "It looks like on the upside we still can see some people
liquidating, or taking profits. So, it's quite mixed from here,"
said Fung, adding that prices could fall back to $1,300.
    Cash gold hit an intraday high of $1,429.81 an ounce
and stood at $1,428.16 by 0549 GMT, up $15.92. Gold sank to
around $1,321 on April 16, the lowest in more than two years, in
a sell-off that surprised ardent gold investors and bulls.
    U.S. gold futures for June delivery hit a session
high of $1,429.50 an ounce, which was partly driven by gains in
Shanghai gold futures.  
    
    Cash gold, which has dropped about 15 percent this year, is
torn between a rise in demand for jewellery and coins, and
investors in exchange-traded funds cutting exposure to it on
worries about central bank sales and prospects of easing
inflation.
    The SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.68 percent to
1,097.19 tonnes on Tuesday from 1,104.71 tonnes on Monday. The
current holdings are at multi-year lows. 
    But premiums for gold bars soared to multi-year highs in
Asia after a spate of physical buying ran down supplies, with
dealers in top consumer India expecting a surge in imports this
month. 
    On Wednesday, sellers in Hong Kong were still quoting
premiums for gold bars as high as $3 an ounce to spot London
prices, their highest level since October 2011. 
    "While some physical buyers have been flocking to gold in
light of lower prices, ETF investors seem to be heading the
other way and cutting their exposure," said Edward Meir, a
metals analyst at futures brokerage INTL FCStone.
    "Right now, we are seeing a mixed bag in the markets, with
the precious group slightly higher, but both metals and energy
are off in early trading."
    Gold prices are expected to end 2013 at $1,450 to $1,550 per
ounce, only partly recovering from a recent brutal selloff that
shook investor confidence after 12 unbroken years of gains, a
Reuters poll showed. 
    In other markets, shares advanced in Asia on Wednesday,
tracking global equities higher on the back of solid U.S.
earnings, but the euro was pressured by soft German data
underscoring the still-fragile state of the euro zone economy.
 
        
  Precious metals prices 0549 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1428.16   15.92   +1.13    -14.71
  Spot Silver        23.21    0.31   +1.35    -23.35
  Spot Platinum    1426.24   12.87   +0.91     -7.09
  Spot Palladium    678.97    7.47   +1.11     -1.88
  COMEX GOLD JUN3  1427.70   18.90   +1.34    -14.80        24729
  COMEX SILVER MAY3  23.20    0.38   +1.66    -23.27         8522
  Euro/Dollar       1.3008
  Dollar/Yen         99.40
 
 (Editing by Clarence Fernandez)