* Gold to end rebound around $1,656 -technicals
* Coming up: U.S. retail sales at 1330 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan and Risa Maeda
SINGAPORE/TOKYO, Feb 13 Palladium rose to its
strongest in 17 months on Wednesday due to a robust outlook for
demand and concerns over supply, while gold inched down,
although purchases by jewellers after the Lunar New Year break
Palladium and its sister metal, platinum, have outperformed
gold so far this year on an improving global economy and after
mining disruptions in South Africa, as well as a drop in supply
from Russia, triggered fears of a deficit in the metals used in
jewellery and auto catalysts.
Spot palladium also got a boost from the most active
palladium contract on the Tokyo Commodity Exchange (TOCOM),
currently December, which rallied to its highest since
mid-2001 at 2,334 yen a gram.
Palladium rose to $772.25 an ounce, its strongest
since September 2011, before easing to $768.22 by 0721 GMT,
little changed from the previous session.
Platinum gained $2.18 to $1,715.67 an ounce, still
within sight of a 17-month peak struck last week.
"I think that behind the rally in palladium lies the air
pollution problem in Beijing. Now that the world is aware of the
problem, China may have to step up its regulations on auto
exhaust gas," said Yasukazu Kyomoto, a manager at Japanese
commodity brokerage Yutaka Shoji Co.
"If so, that would boost demand for auto catalyst and based
on such speculation, money from funds is flowing in. Unlike in
Europe, both palladium and platinum can be used in auto
catalysts in China. People are now being lured to palladium,
which looks undervalued versus platinum."
Excessive pollution levels have prompted the Beijing
government to roll out a series of temporary emergency measures,
such as shutting down around 100 heavily polluting factories and
taking 30 percent of government vehicles off roads.
Spot gold fell $1.40 an ounce to $1,649.00 after
rising as high as $1,653.20. U.S. gold was little
changed at $1,649.40 an ounce.
"Technically the metal appears susceptible to a move lower,
perhaps to the 1,600 an ounce level or even $1,550 an ounce,"
Deutsche Bank said in a report.
"There is a distinct lack of obvious positive catalysts for
gold at the moment, with the current environment seemingly
bereft of macro concerns."
The euro hardly moved against the dollar, while the yen
held firm, having swung higher in dramatic style as investors
cut bearish positions after an official from the Group of Seven
said there were concerns about excessive movements in Japan's
"We are seeing some good physical requests. Indonesia is
buying and there's interest from Thailand, which bought a fair
bit of gold last night," said a physical dealer in Singapore.
"I would say there's still good buying around, but I haven't
seen demand from India yet. The premiums for gold bars are
unchanged at $1.20."
After a 50 percent import duty hike to 6 percent last month,
the Reserve Bank of India has recommended putting curbs on
imports, along with launching gold-linked products to limit
The wedding and festival season are underway in India, the
world's top gold consumer, with jewellery a key part of
Most markets in Asia have reopened after the Lunar New Year
holiday, although China will remain closed all week.
Precious metals prices 0721 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1649.00 -1.40 -0.08 -1.53
Spot Silver 31.03 -0.05 -0.16 2.48
Spot Platinum 1715.67 2.18 +0.13 11.77
Spot Palladium 768.22 -0.78 -0.10 11.01
COMEX GOLD APR3 1649.40 -0.20 -0.01 -1.58 11560
COMEX SILVER MAR3 31.06 0.04 +0.13 2.75 2578
COMEX gold and silver contracts show the most active months
(Editing by Joseph Radford)