* Spot gold headed for 3.4-percent weekly rise
* Spot gold may rise to $1,749/oz - technicals
* Coming up: China, industrial output, retail sales, Oct;
By Rujun Shen
SINGAPORE, Nov 9 Gold rose to a three-week high
on Friday, on track for its first weekly gain in four, as hopes
U.S. monetary policy would remain loose after President Barack
Obama's re-election and worries about looming fiscal woes
boosted bullion's appeal.
Investor appetite for safe-haven assets such as gold has
increased along with concerns about the U.S. "fiscal cliff", an
automatic tax hike and spending cuts amounting to $600 billion
due to take effect early next year that could send the U.S.
economy back to recession.
"Investors have shifted their focus to the fiscal cliff
after the election," said Chen Min, an analyst at Jinrui Futures
in the southern Chinese city of Shenzhen.
"They believe the Fed will further ease the monetary policy
to offset whatever impact that will have on the economy, which
will be an incentive for gold and silver prices to climb up."
Spot gold rose to a three-week high of $1,737.60 an
ounce, and traded at $1,731.77 by 0739 GMT. It jumped above the
20-day moving average at $1,718.20 for the first time in a
The precious metal was on course for a weekly rise of 3.4
percent, its biggest one-week gain since late August.
U.S. gold was up 0.4 percent to $1,731.90.
Technical analysis suggested that spot gold could climb to
$1,749 an ounce during the day, said Reuters market analyst Wang
China's factory output quickened more than expected in
October and inflation eased to its slowest pace in nearly three
years, giving policymakers scope to further loosen monetary
policy if needed to support growth.
Other safe-haven assets, such as the dollar and U.S.
Treasuries, also firmed. The dollar hit a two-month high
against a basket of currencies in the previous session, while
U.S. Treasuries jumped after a strong sale of 30-year debt.
But some analysts argued that the rise in these assets and
commodities was a result of investors relocating their money
after having moved into equities before the U.S. election on
hopes Republican candidate Mitt Romney would win.
"The strength in commodities and a 3 percent fall in the VIX
volatility index in light of weak equities and rising bonds
stands out," said ANZ in a research note.
"It looks like we are seeing repositioning of portfolios
after the U.S. election rather than a broader risk-off move. It
remains to be seen whether commodities will play catch up with
the losses elsewhere."
The euro zone risk still lurks in the background, as the
European Central Bank refrained from further stimulus measures
and said it cannot do much more to help Greece and gave Spain
none of the assurance it wants that ECB bond buying will lower
its borrowing costs.
The Greek government is expected to push through the 2013
budget law on Sunday, after it voted by a razor thin margin to
approve an austerity package needed to unlock vital aid and
Echoing firming gold prices, holdings of gold-backed
exchange-traded funds rose to a record high of 75.133 million
ounces by Nov. 7.
China's vehicle sales climbed 5.3 percent in October from a
year earlier, rebounding after a decline in the previous month
due to sluggish sales by Japanese carmakers amid a territorial
dispute between the two countries.
Steady growth in the world's No.1 car market will support
prices of platinum group metals, widely used in producing
autocatalysts to clean up vehicle exhaust.
Spot platinum traded up half a percent to $1,547.74
an ounce, on course for a 0.6-percent weekly rise, snapping four
sessions of losses. Spot palladium was down 0.2 percent
to $610.49 an ounce, headed for its second weekly rise.
Precious metals prices 0739 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1731.77 1.78 +0.10 10.74
Spot Silver 32.24 -0.08 -0.25 16.43
Spot Platinum 1547.74 6.99 +0.45 11.11
Spot Palladium 610.49 -1.48 -0.24 -6.44
COMEX GOLD DEC2 1731.90 5.90 +0.34 10.54 19245
COMEX SILVER DEC2 32.26 0.02 +0.06 15.57 5915
COMEX gold and silver contracts show the most active months
(Editing by Miral Fahmy)