* Investors hope for stimulus from more central banks
* Spot gold faces resistance at $1,785/oz -technicals
* Coming up: Reserve Bank of Australia rate decision; 0430
(Adds details, comments; updates prices)
By Rujun Shen
SINGAPORE, Oct 2 Gold inched up on Tuesday,
crawling back towards an 11-month high hit in the previous
session, supported by a slightly weaker dollar and investor
hopes for further central bank action to battle the grim outlook
for global economic growth.
Spot gold marked an 11-month peak of $1,791.20 on Monday as
an unexpected expansion in U.S. factory activity and more
clarity on Spain's bailout plan sent some relief through the
market, knocking the dollar index from a three-week high.
A weaker greenback makes dollar-priced gold more attractive
to buyers holding other currencies.
Analysts said that more central banks may follow the lead of
the European Central Bank, the U.S. Federal Reserve and the Bank
of Japan in adopting further stimulus measures to spur economic
growth, benefiting gold which is a good hedge against rampant
"We believe that expanding monetary conditions globally will
provide the catalyst for higher gold prices over the near-medium
term," Deutsche Bank said in a research note.
The bank said the trend of expanding monetary conditions
will help gold exceed $2,000 in the first half of 2013.
Australia's central bank cut interest rates by a quarter
point to a three-year low of 3.25 percent as a slowdown in
China, falling export prices and a high currency dimmed the
But gold barely moved, with cash prices trading at $1,777.75
an ounce by 0629 GMT, up 0.2 percent from the previous close.
U.S. gold edged down 0.2 percent to $1,780.30.
"Gold is stuck between a weaker Australian dollar and a
stronger euro after the rate cut," said a Singapore-based
trader, who expected the euro's influence to increase as
Europe's trading day starts.
The Australian dollar fell to a one-month low versus the
dollar and slid against the euro.
Technical analysis suggests that spot gold's ascent could
face resistance at $1,785 during the day, said Reuters market
analyst Wang Tao.
Spain, which has become the focus of the euro zone debt
crisis, will dominate market sentiment.
The "fiscal cliff" also looms as a serious concern. The term
refers to a deadline at the end of the year for Washington to
reach agreement to avoid spending cuts and tax rises, which
could throw the U.S economy into recession.
"We believe the major beneficiary of a third round of
quantitative easing by the U.S. Federal Reserve and fiscal cliff
fears will be the precious metals complex. Not only will it keep
U.S. real interest rates negative for the foreseeable future,
but, it will sustain U.S. dollar weakness," Deutsche Bank said.
Echoing Deutsche Bank's bullish forecast, holdings of
gold-backed exchange-traded funds posted a small gain to 73.978
million ounces by Sept. 30, inching towards a record high of
74.288 million ounces hit last week.
Trade was thin in Asian hours, as markets in China, Hong
Kong and India are closed for public holidays. China will remain
shut for the rest of the week.
Spot silver rose half a percent to $34.80, easing
from a seven-month high of $35.36 struck in the previous
Spot platinum inched down 0.2 percent to $1,780.30,
after posting five sessions of straight gains.
Top global platinum producer Anglo American Platinum
(Amplats) said on Monday it would fire all strikers who
did not attend disciplinary hearings the following day as an
illegal strike continued at four of its South African mines.
Precious metals prices 0629 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1777.75 3.96 +0.22 13.68
Spot Silver 34.80 0.16 +0.46 25.68
Spot Platinum 1668.49 -2.51 -0.15 19.78
Spot Palladium 641.97 3.47 +0.54 -1.61
COMEX GOLD DEC2 1780.30 -3.00 -0.17 13.63 8689
COMEX SILVER DEC2 34.88 -0.08 -0.22 24.93 1534
COMEX gold and silver contracts show the most active months
(Editing by Miral Fahmy)