PRECIOUS-Gold stays near 3-month high, fund inflows support

Wed Jul 2, 2014 2:32am EDT

* SPDR Gold Trust sees inflow of 5.69 tonnes
    * Platinum near 10-month highs on supply worries
    * Coming up: U.S. ADP national employment June; 1215 GMT

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, July 2 (Reuters) - Gold held close to a
three-month peak on Wednesday, boosted by a second day of
inflows into the top bullion-backed fund, while platinum traded
at a near 10-month high on supply worries. 
    SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings rose 5.69 tonnes to
796.39 tonnes on Tuesday. 
    The fund is a proxy for market sentiment due to its size,
and flows in and out of the fund tend to impact prices.
    "Two days of big flows into the fund is supporting prices,"
said one Hong Kong-based trader. "This is a good sign as
physical demand in Asia is weak because of the rise in prices."
    "From here, an upside looks more likely given persistent
tensions in Iraq and Ukraine."
    Spot gold was little changed at $1,325.20 an ounce by
0626 GMT, just shy of the three-month top of $1,332.10 hit in
the previous session. Physical demand across top buyer Asia has
been lacklustre due to high prices.
    Investors are waiting for a key U.S. jobs report on Thursday
for indications on the strength of the economy, which will then
give direction to prices of the safe-haven metal that continues
to be underpinned by geopolitical tensions in Iraq and Ukraine. 
    Ukrainian forces struck at pro-Russian separatist bases in
eastern regions with air and artillery strikes on Tuesday after
President Petro Poroshenko announced he would not renew a
ceasefire but go on the offensive to rid Ukraine of "parasites".
 
    In Iraq, Sunnis and Kurds walked out of the first session of
the country's new parliament on Tuesday after Shi'ites failed to
name a prime minister to replace Nuri al-Maliki, dimming any
prospect of an early national unity government to save Iraq from
collapse. 
    Among other precious metals, platinum dipped slightly
to $1,497.95 after gaining 1.5 percent on Tuesday, when it hit a
near 10-month high of $1,511.00.
    Last week, the world's biggest platinum producers reached a
wage settlement with miners in South Africa after a five-month
long strike. But fears of further labour unrest and possible
restructuring at mines continued to support prices of the metal.
    Platinum, a key component of autocatalysts, was also
supported as U.S. June auto sales posted the best annualized
figures in eight years, hitting levels not seen since before the
financial crisis that led to the bankruptcy of two American
automakers. 
    
    PRICES AT 0626 GMT    
 Metal            Last      Change   Pct chg
                                     
 Spot gold          1325.2    -0.24    -0.02
 Spot silver            21    -0.01    -0.05
 Spot platinum     1497.95    -4.95    -0.33
 Spot palladium      848.5     -1.3    -0.15
 Comex gold         1326.3     -0.3    -0.02
 Comex silver        21.07   -0.047    -0.22
 Euro               1.3677                  
 DXY                79.826                  
                                     
 COMEX gold and silver contracts show the
 most active months
 
 (Editing by Himani Sarkar)
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