PRECIOUS-Gold breaks above $1,400 on weak U.S. durable goods data

Mon Aug 26, 2013 4:44pm EDT

* Gold hits 11-week high of $1,406.01
    * Bullion seen vulnerable for pullback after rallies
    * Top gold-backed fund sees biggest 1-day inflow in a year
    * Coming up: U.S. S&P home prices index, consumer confidence
Tues

 (Adds analyst's comment, technical view, second byline,
dateline, updates market activity)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Aug 26 (Reuters) - Gold prices rose to an
11-week high on Monday after a surprisingly weak report on U.S.
durable goods boosted hopes that the Federal Reserve will
maintain its bond-buying to prolong economic stimulus.
    The metal breached $1,400 for the first time since June 7
after data showed orders for long-lasting U.S. manufactured
goods recorded their biggest drop in nearly a year in July,
while a gauge of planned business spending on capital goods also
tumbled. 
    Monday's reports fed into an increasingly negative economic
picture and followed data for July industrial production,
housing starts and new home sales that have suggested growth
this quarter will probably not accelerate as much as economists
had hoped.
    Gold has now rallied over $200 since the end of June when
prices hit three-year lows. Recent disappointing U.S. economic
data added to confusion over when the Fed may curb its
bond-buying stimulus, which has kept U.S. interest rates near
record lows and increased the allure of hard assets.
    Some analysts say gold is due for a pullback after rising
about 10 percent in the past three weeks.
    "The gains were mainly from short covering. If gold can't
convincingly break above $1,400, we may see profit taking," said
Howard Wen, metals analyst at HSBC.
    Spot gold edged up 0.3 percent to stand at $1,400.61
an ounce at 3:38 PM EDT (1938 GMT), having earlier peaked at 
$1,406.10.
    U.S. COMEX gold futures for December delivery settled
down $2.70 at $1,393.10 an ounce.
    Trading volume was down about 50 percent from the 30-day
average, preliminary Reuters data showed. The London market was
shut Monday for the Bank Holiday.
    
    BIGGEST ETF INFLOW IN 12 MONTHS
    As a gauge of investment demand, holdings of the SPDR Gold
Trust, the world's largest gold-backed exchange-traded
fund, rose 6.61 tonnes to 920.13 tonnes on Friday, the ETF's
biggest one-day inflow in percentage terms in a year. 
    On charts, gold's break above $1,400 and bullish price
patterns suggest more gains are in store for the precious metal
which may have bottomed out two months ago, technical analysts
said. 
    
    Private investors were sellers of gold and silver in the
last several months, according to online precious metals market
BullionVault. 
    Sellers in gold exceeded buyers by 22 percent in the three
months from May to July, while U.S. gold sellers exceeded buyers
by 15 percent over the same period, said Miguel Perez-Santalla,
vice president at BullionVault.
    Among other precious metals, silver rose 1 percent to
$24.22 an ounce. Platinum was up 0.6 percent to $1,542.49
an ounce, while palladium fell 0.7 percent to $743.72 an
ounce. 

 3:38 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1393.10  -2.70  -0.2  1388.40 1407.00   95,414
 US Silver SEP  24.010  0.272   1.1   23.800  24.425   54,796
 US Plat OCT   1544.50   2.90   0.2  1531.10 1550.80    6,204
 US Pall SEP    746.05  -4.80  -0.6   743.10  755.00    7,561
                                                               
 Gold          1400.61   4.17   0.3  1390.23 1406.01         
 Silver         24.220  0.230   1.0   23.900  24.400
 Platinum      1542.49   9.29   0.6  1534.50 1547.00
 Palladium      743.72  -5.24  -0.7   747.00  753.00
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        100,158   181,859   190,211     24.99    2.48
 US Silver       77,075    54,053    53,242     32.41    0.79
 US Platinum      6,358     9,134    12,491     20.62    0.06
 US Palladium    14,228     4,687     5,313                  
                                                               
 
 (Additional reporting by A. Ananthalakshmi in Singapore;
editing by Keiron Henderson and Alden Bentley)
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