PRECIOUS-Gold ticks up, heads for 2nd straight weekly gain

Fri May 3, 2013 2:53am EDT

* Gold ticks up on ECB rate cut, Fed's stimulus
    * Persistent ETF outflows to cap gains
    * Coming Up: U.S. Nonfarm payrolls; 1230 GMT

 (Updates prices, adds GFMS platinum report)
    By Lewa Pardomuan
    SINGAPORE, May 3 (Reuters) - Gold rose on Friday, heading
for a second straight weekly gain, as a cut in interest rates by
the European Central Bank and U.S. Federal Reserve's decision to
stick to its stimulus programme burnished bullion's appeal as a
hedge against inflation.
    But gains could still be capped by persistent outflows on
exchange-traded funds, with investors unsure if a recent surge
in physical demand was sufficient to help gold recover towards
$1,500 an ounce -- a level last seen in early April.
    Spot gold rose $8.32 an ounce to $1,474.56 by 0624
GMT, well below a lifetime high around $1,920 an ounce hit in
September 2011.    
    "Sentiment is of course not that good because there's still
redemption on the ETFs, while the physical market is upbeat. You
can say it's a tug-of-war," said Ronald Leung, chief dealer at
Lee Cheong Gold Dealers in Hong Kong.
    A break above a recent high around $1,485 an ounce could
help gold revisit $1,500, Leung said.
    Cash and U.S. gold futures plunged to around $1,321 on April
16, their lowest in more than two years, after a drop below
$1,500 led to a sell-off that stunned investors and prompted
them to slash holdings of exchange-traded funds.
    SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.56 percent to
1,069.22 tonnes on Thursday, the lowest since September 2009.
 
     But the drop in prices also spurred purchases of gold bars,
coins and nuggets across Asia and in other parts of the world,
keeping physical premiums at multi-year highs of around $3 an
ounce to the spot London prices. 
     With prices in Shanghai <0#SHAU:> fetching premiums to cash
gold and U.S. bullion futures, jewellers, investors and
speculators in the world's No.2 consumer after India stepped up
purchases as they returned from a break earlier this week.
    U.S. gold for June delivery stood at $1,474.50 an
ounce, up $6.90.
    "Chart based resistance remains in the $1,475-$1,480 an
ounce area, which has held the topside for five sessions.
Near-term support is at $1,440 an ounce," ANZ said in a report.
    
    Gold should draw support from recent stimulus measures taken
by central banks across the world to spur the economy. 
    The ECB cut its main interest rate by 25 basis points to a
record low of 0.50 percent on Thursday, after inflation fell
well below the bank's target and weak economic surveys increased
doubts about a recovery. 
    The decision came a day after the U.S. Fed's recommitment to
its aggressive stimulus programme, and a month after the Bank of
Japan stunned markets by promising to inject about $1.4 trillion
into its economy to spur growth.
    Investors are now waiting for the key U.S. nonfarm payrolls
report for April due on Friday for clues on the longer-term
prospects for the Fed's monetary stimulus. 
    Easy monetary policy extended gold's bull run to a 12th
consecutive year last year, as investors bought bullion to hedge
against inflation and economic uncertainties.
    Other precious metals tracked gold higher, with platinum
 shrugging off a report by consultancy GFMS that projected
a surplus in the global platinum market this year amid weak
demand for the autocatalyst metal from carmakers in Europe.
    But unrest in the South African mining sector could push
prices as high as $1,750 an ounce, GFMS added. 
    In other markets, Asian shares rose on hopes of a stronger
global economic recovery after the ECB cut interest rates and
held out the possibility of further easing while the euro
remained in the doldrums. 
    
  Precious metals prices 0624 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1474.56    8.32   +0.57    -11.94
  Spot Silver        24.03    0.24   +1.01    -20.64
  Spot Platinum    1502.49    8.49   +0.57     -2.12
  Spot Palladium    696.08    7.08   +1.03      0.59
  COMEX GOLD JUN3  1474.50    6.90   +0.47    -12.01        13954
  COMEX SILVER JUL3  24.01    0.18   +0.76    -20.58         5927
  Euro/Dollar       1.3065
  Dollar/Yen         98.06
 
  COMEX gold and silver contracts show the most active months
 
 (Editing by Tom Hogue and Himani Sarkar)