* Bundesbank's chief says euro zone crisis not over
* ETFs liquidation continues but at slower pace
* Gold trading volume in China up 24 pct in Jan-Feb
* Coming up: US import, export prices, retail sales Weds
(Adds market activity, updates prices)
By Frank Tang
NEW YORK, March 12 Gold rose nearly 1 percent on
Tuesday after a top European Central Bank official said the euro
zone crisis was not over, but the metal remained vulnerable as
redemptions in gold-backed exchange-traded funds continued,
Bundesbank's chief Jens Weidmann, also a member of the ECB
Governing Council, also said the German central bank had set
aside billions more euros against what it deemed risky ECB
The metal briefly rose to almost $1,600 an ounce, a near
two-week high. Last week, it had found support in an area near
$1,560 an ounce, weighed down by an equities rally and an
improving U.S. economic outlook.
A lack of buying interest in gold investment products,
however, could trigger another round of pullback, analysts said.
"Prices appear to be building some mild upside momentum, but
until liquidation in gold exchange-traded funds (ETFs) ceases,
we do not expect too much on the upside for gold," said James
Steel, metals analyst at HSBC.
Spot gold was up 0.8 percent at $1,593.20 by 4:22
p.m. EDT (2022 GMT), its biggest one-day gain in two weeks.
Earlier, gold rose as much as 1.1 percent to $1,598.20 an
ounce, its highest level since Feb 28.
U.S. gold futures for April delivery settled up
$13.70 at $1,591.70 an ounce. Trading volume was about 25
percent below its 30-day average, preliminary Reuters data
A brighter U.S. economic outlook appears to prompt momentum
investors to favor equities over gold.
Holdings of SPDR Gold Trust, the world's biggest
gold-backed ETF, fell to the lowest since October 2011 at
1,236.729 tonnes as of Monday.
Other analysts, however, said that the pace at which ETFs
investors exit their positions has been easing in the past week,
which should help stem recent losses in gold.
On Friday, gold slid to a two-week low near $1,560 before
ended flat after a better-than-expected U.S. nonfarm payrolls
The Dow Jones industrial average ended little changed
on Tuesday after it hit a record high for the fifth consecutive
session on Monday. The broad-based S&P 500, however,
finished slightly lower on euro zone worries.
PHYSICAL DEMAND IN ASIA
Physical buying continued in Asia, spurred by comments from
Kikuo Iwata, nominee to the Bank of Japan's deputy governor
role, reiterating that the central bank must boost the
quantitative easing aiming at ending years of deflation.
Precious metals interest remains high in China, with average
daily trading combined volumes on the three main gold contracts
on the Shanghai Gold Exchange
up 24 percent in the first two months of the year,
according to Reuters calculations.
With major macro economic data lacking during the week, the
next macro event is U.S. consumer inflation data on Friday,
which is likely to provide some trading direction.
The gold market was also monitoring the U.S. budget crisis,
which some see as a threat to the nascent recovery in the
world's top economy.
Among other precious metals, silver was up 0.8
percent to $29.17, tracking gold's upward move. Platinum
eased 66 cents to $1,592.74, and palladium fell 0.8
percent to $769.97 an ounce.
4:22 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold APR 1591.70 13.70 0.9 1578.80 1597.60 138,110
US Silver MAY 29.171 0.318 1.1 28.870 29.350 25,861
US Plat APR 1595.00 -6.20 -0.4 1590.20 1615.00 11,891
US Pall JUN 775.50 -3.70 -0.5 769.50 781.90 2,635
Gold 1593.20 12.81 0.8 1580.58 1598.20
Silver 29.170 0.220 0.8 28.910 29.350
Platinum 1592.74 -0.66 0.0 1594.50 1610.50
Palladium 769.97 -6.09 -0.8 772.75 778.25
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 163,876 202,353 175,274 12.82 -0.59
US Silver 27,846 63,648 52,813 20.2 -0.72
US Platinum 14,601 13,711 10,841 17.23 -0.80
US Palladium 2,677 9,094 5,257
(Additional reporting by Clara Denina in London and Rujun Shen
in Singapore; Editing by Bob Burgdorfer)