* Risk appetite rises on new year, China PMI
* Spot gold may rise to $1,629/oz - technicals
* Coming up: U.S. ISM Manufacturing PMI, Dec; 1500 GMT
By Rujun Shen
SINGAPORE, Jan 3 Gold rallied more than 1
percent and silver jumped over 2 percent on Tuesday as investors
returned in the new year with a renewed appetite for riskier
assets such as commodities, although global economic worries
still weighed on sentiment.
Better-than-expected manufacturing data from China fuelled
interest among investors who had moved to the sidelines because
of year-end credit tightness. A weaker dollar also helped fuel
gains in commodities.
"Everyone is a bit more optimistic at the beginning of the
year," said Ong Yi Ling, an analyst at Phillip Futures.
But Ong cautioned that the euphoria may not last long for
gold as market sentiment remains fickle due to the shaky global
Gold could drop below $1,500 in the first quarter of 2012
and is unlikely to test its record high hit last September until
later 2012, a Reuters poll showed.
Spot gold rose as much as 1.5 percent to $1,589.65 an
ounce and eased slightly to $1,588.29 by 0724 GMT, rebounding
from a 10-percent loss in December.
The most-active U.S. gold futures contract rallied
1.5 percent to $1,589.50.
Technical analysis suggested spot gold could rise towards
$1,629 an ounce during the day, said Reuters market analyst Wang
Iran's progress in its nuclear pursuit has gripped the oil
market and could potentially support safe haven demand in gold.
But for now, gold's move hinges on macroeconomic conditions and
changes in risk appetite.
Investors await a raft of U.S. economic data this week,
including ISM Manufacturing PMI later in the day, factory orders
on Wednesday and non-farm payroll data on Friday, after recent
data showed that the world's top economy was
SILVER LEADS GAINS IN PRECIOUS METALS
Cash silver gained 2.2 percent to $28.41, leading the
rally in the precious metals complex. U.S. silver rose
1.8 percent to $28.41.
The metal, with extensive industrial applications, lost
nearly 10 percent in 2011 as worries about the global economy
weakened prospects of industrial metals.
"Silver is one of the more appealling trades of the new
year, after a lot of positions have been emptied out," said a
"Now the turn of the year has happened and we will probably
see silver back on radar screens for some accounts, especially
those with healthy tolerance for risk."
Managed money cut net length on U.S. silver futures and
options to 6,200 lots in the week ended Dec. 27,
its lowest in more than three years, according to data from the
U.S. Commodity Futures Trading Commission.
Precious metals prices 0724 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1588.29 22.88 +1.46 1.57
Spot Silver 28.41 0.61 +2.19 2.60
Spot Platinum 1408.24 14.24 +1.02 1.09
Spot Palladium 654.47 4.47 +0.69 0.69
TOCOM Gold 3887.00 4.00 +0.10 0.10 68736
TOCOM Platinum 3462.00 47.00 +1.38 1.38 15434
TOCOM Silver 67.20 0.80 +1.20 1.20 646
TOCOM Palladium 1570.00 -7.00 -0.44 -0.44 373
COMEX GOLD FEB2 1589.50 22.70 +1.45 1.45 12179
COMEX SILVER MAR2 28.41 0.49 +1.76 1.74 2309
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Editing by Himani Sarkar)