June 13, 2012 / 9:46 AM / in 5 years

PRECIOUS-Gold rises for 4th day, eyes technical resistance

5 Min Read

* Bullion initial rally fizzles as euro stays higher
    * Investors eye weekend Greek election, European debt level
    * Gold could falter for failing to breach $1,640/oz
    * Coming up: U.S. consumer prices, jobless claims Thurs

 (Adds details, updates market activity)	
    By Frank Tang	
    NEW YORK, June 13 (Reuters) - Gold rose for a fourth
straight session o n W ednesday on safe-haven bids due to
uncertainties in Europe ahead of a key election in Greece, but
the metal's repeated failures to break above major chart
resistance could trigger technical selling.	
    Bullion raced toward $1,625 an ounce earlier in the session
after weak U.S. retail sales and wholesale prices data raised
the prospect of additional monetary easing from the Federal
Reserve. Concerns about Spanish and Italian debt
and jitters over Sunday's Greek election also kept gold prices
    The metal, which has largely moved in sync with risky assets
so far this year, later pared gains even though the euro stayed
higher. Gold has also repeatedly failed to break above $1,640
for over a month despite several recent rallies. 	
    "Right now there seems to be a disconnect with gold and the
euro, and my fear is that if we don't get above $1,640, we can
have from a $50 to $70 selloff in the coming days," said Anthony
Neglia, president of Tower Trading and a COMEX gold options
floor trader.	
    Spot gold was up 0.5 percent at $1,617.70 an ounce by
2:39 p.m. EDT (1839 GMT), having earlier hit a high of
    After briefly falling to $1,580 an ounce, the metal has
gained 4 percent in the last four sessions on better physical
demand and fund buying in call options, as signs of a worsening
European crisis fueled speculation of more monetary easing by
central banks.	
    On the charts, gold's technical outlook brightened after the
metal broke above its 50-day average after its four-day rise.
However, traders said bullion must breach last week's high of
$1,640 an ounce to extend its rally.	
    U.S. COMEX gold futures for August delivery settled
up $5.60 at $1,619.40 an ounce, with trading volume about 40
percent below its 30-day average, preliminary Reuters data
    Gold's investment-hedge appeal also improved after a $125
million European bailout on debt-stricken Spanish banks earlier
this week should provide markets with additional liquidity.	
    In addition, some investors have been accumulating bullion
ahead of a policy meeting by the Federal Reserve next week. Any
possible mention of a new stimulus program in the Fed's policy
statement will likely send gold prices rallying.	
    The metal had rallied as much as 15 percent after the Fed in
January said it would keep rates near zero until at least late
2014, but gold has since tumbled several times after Fed
Chairman Ben Bernanke did not mention further easing in his
Congressional testimonies.	
    Year to date, gold is up about 3 percent.	
    SocGen analyst Robin Bhar said that markets were speculating
that Bernanke may warm toward a third round of asset-buyback
program known as quantitative easing, and that will be enough to
put a floor under the gold price.	
    Among other precious metals, silver slipped 0.1
percent to $28.91 an ounce. Spot platinum gained 1
percent to $1,461.08 an ounce, while palladium eased 0.6
percent to $616.72 an ounce.	
 2:39 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1619.40   5.60   0.3  1607.00 1626.00  118,201
 US Silver JUL  28.941 -0.008   0.0   28.700  29.095   31,718
 US Plat JUL   1466.80  12.40   0.9  1445.90 1469.90    7,542
 US Pall SEP    623.30  -0.95  -0.2   618.00  629.00    1,745
 Gold          1617.70   8.20   0.5  1606.65 1624.36         
 Silver         28.910 -0.030  -0.1   28.760  29.120
 Platinum      1461.08  13.95   1.0  1450.63 1466.49
 Palladium      616.72  -3.68  -0.6   620.52  625.25
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        123,231   215,720   196,755     24.67    1.08
 US Silver       38,476    49,481    53,935     32.04   -0.34
 US Platinum     10,027     8,513     8,000        18    0.00
 US Palladium     1,887     5,731     4,510                  
 (Additional reporting by Jan Harvey and Veronica Brown in
London; editing by Jim Marshall and Marguerita Choy)

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