PRECIOUS-Gold up 2 percent on strong Chinese trade data, dollar fall

Thu Aug 8, 2013 12:34pm EDT

* China's import, export data raise economic hopes
    * Dollar index falls to seven-week low
    * Pent-up demand seen in gold on uncertain Fed tapering

 (Adds fund manager comment, second byline, NEW YORK to
dateline; updates market activity)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Aug 8 (Reuters) - Gold jumped 2 percent to
above $1,300 an ounce on Thursday as surprisingly strong
rebounds in China's exports and imports sparked economic
optimism, lifting bullion's inflation-hedge appeal.
    Silver and platinum group metals also rallied after data
showed Chinese imports of industrial commodities and raw
materials rose in July and the world's second-largest economy
showed signs of stabilizing after more than two years of slow
growth. 
    "It looks like things in China are moving into the right
direction, so that means deflationary forces are brushed aside
and inflationary forces are more popular now," said Axel Merk,
portfolio manager of Merk Funds, which has $500 million in
currency mutual-fund assets. 
    Gold prices also benefited from the U.S. dollar's fall to a
seven-week low against a basket of currencies. 
    Traders said pent-up buying underpinned gold as recent
inconclusive economic data and comments from Federal Reserve
policymakers raised doubts about when the U.S. central bank will
begin reducing stimulus. 
    Spot gold rose 2 percent to $1,313.35 an ounce by
12:02 p.m. EDT (1602 GMT), having hit a session high of
$1,313.95, $1 above key technical resistance at its 50-day
moving average.
    Bullion had traded as low as $1,180 an ounce in late June on
fears of massive fund selling as the Fed looked set to cut its
bond-buying stimulus as early as September.
    U.S. gold futures for December delivery were up
$22.80 an ounce to $1,308.90, with trading volume on track to
finish below its 30-day average, preliminary Reuters data
showed.
    Among other precious metals, silver was up 3.5
percent at $20.24 an ounce. Platinum rose 3.3 percent to
$1,482.25 an ounce, while palladium gained 2.4 percent to
$738.50 an ounce.
 Prices at 12:02 p.m. EDT (1602 GMT)                           
 
                               LAST      NET    PCT     YTD
                                         CHG    CHG     CHG
 US gold                    1308.90    22.80   1.8%  -21.9%
 US silver                   20.230    0.007   3.7%  -33.1%
 US platinum                1488.60    50.30   3.5%   -3.3%
 US palladium                741.50    18.35   2.5%    5.4%
 
 Gold                       1313.35    26.21   2.0%  -21.6%
 Silver                       20.24     0.68   3.5%  -33.2%
 Platinum                   1482.25    47.78   3.3%   -3.5%
 Palladium                   738.50    17.53   2.4%    5.2%
 
 Gold Fix                   1298.25    10.50   0.8%  -22.0%
 Silver Fix                   19.73    46.00   2.4%  -34.1%
 Platinum Fix               1465.00    17.00   1.2%   -3.8%
 Palladium Fix               739.00    11.00   1.5%    5.7%
 
 (Editing by James Jukwey, Keiron Henderson, Dale Hudson and
Lisa Von Ahn)
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