August 9, 2012 / 4:10 AM / 5 years ago

PRECIOUS-Gold inches up, investors look for firm policy steps

* China July inflation at 30-mth low, factory output 3-yr
low
    * Technical analysis suggests breakout ahead
    * Coming up: U.S. jobless claims, weekly; 1230 GMT

 (Adds details, updates prices)
    By Rujun Shen
    SINGAPORE, Aug 9 (Reuters) - Gold inched up on Thursday
after China's economic data added to hopes for more monetary
easing there, though most investors remained on the sidelines,
looking for clear signals on possible economic stimulus in
Europe and the United States.
    Trading interest has been sluggish in the past few days as
market participants wait for the European Central Bank to
announce details of a bond-buying programme, while the U.S.
Federal Reserve gave few hints on further easing at its last
policy meeting in early August.
    "There seems to be sense of frustration that gold hasn't
pushed out of the July ranges. But the frustration may come to
an end soon as we see a pennant formation on the chart," said
Nick Trevethan, senior commodity strategist at ANZ in Singapore.
    He was referring to a chart pattern in which converging
trendlines, generally displayed as lower highs and higher lows
in narrowing trading ranges, are followed by a breakout in
either direction.
    The next key event for the gold market will be the annual
economic policy symposium in Jackson Hole, Wyoming in late
August, Trevethan added.
    "The breakout on the chart will be contingent on the
commentaries that emerge from the symposium," he said.
    Spot gold had edged up 0.3 percent to $1,615.64 per
ounce by 0638 GMT. 
    The U.S. gold futures contract for December delivery 
gained 0.2 percent to $1,618.70.
    Trading volume on the popular Shanghai gold spot deferred
contract dropped to a three-month low of 8,872
contracts on Wednesday, after double-counting. The contract
stood at 331.23 yuan per gram, or $1,622.24 per ounce.
    
    Rampant money printing by central banks is seen to support
gold demand, as it raises the inflation outlook and drives
investors to gold, a hedge against rising prices.
    China's annual rate of consumer price inflation eased to a
30-month low of 1.8 percent in July, while factory output
dropped to a three-year low, increasing expectations that
Beijing will take further action to support the economy.
 
    China overtook India as the world's top gold consumer late
last year. In the first half of 2012, gold inflows from Hong
Kong, a key conduit for China's gold imports, grew about sixfold
from a year earlier. 
   
    Precious metals prices 0638 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1615.64    4.35   +0.27      3.32
  Spot Silver        28.16    0.17   +0.61      1.70
  Spot Platinum    1413.00    8.00   +0.57      1.44
  Spot Palladium    585.40    3.50   +0.60    -10.28
  COMEX GOLD DEC2  1618.70    2.70   +0.17      3.31        11178
  COMEX SILVER SEP2  28.12    0.05   +0.16      0.73         3482
  Euro/Dollar       1.2376
  Dollar/Yen         78.48
  COMEX gold and silver contracts show the most active months 
 
 (Editing by Chris Lewis)

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