* Worries over U.S. "fiscal cliff" support gold
* China seen surpassing India as top gold consumer
* South African platinum output falls 17.8 pct in Sept
By David Brough
LONDON, Nov 8 Gold prices held near $1,715 an
ounce on Thursday as investors' focus shifted from President
Barack Obama's re-election to U.S. fiscal woes and the euro zone
debt crisis, which pressured the euro to a two-month low against
Worries about the fiscal cliff are supportive of safe-haven
gold, but a strong dollar offset upward pressure on prices by
making it more expensive for buyers holding other currencies.
Spot gold was at $1,715.55 an ounce by 1349 GMT, down
0.04 percent, while U.S. gold inched up 0.06 percent to
Gold prices hit a 2-1/2 week high at $1,731.40 an ounce on
Wednesday after Obama's re-election gave markets a boost by
ending weeks of political uncertainty, but they have struggled
to maintain those gains.
In the longer term, gold is likely to benefit from
uncertainty over the looming "fiscal cliff" when nearly $600
billion worth of spending cuts and tax increases kick in with
the risk of pushing the U.S. economy into deep recession.
"We will continue with support around $1,700 and $1,680, but
before the end of the year gold should gradually rise, because
we have liquidity (quantitative easing), and low yields," said
Andrey Kryuchenkov, analyst with VTB Capital.
Afshin Nabavi, head of trading at MKS Finance, said,
"(Tackling the fiscal cliff) is not going to be an easy task
but.... having seen how close the election was between the two
(Obama and Mitt Romney), it seems Obama is ready to start a
Nabavi said he saw key resistance for gold at $1,730, close
to Wednesday's high, and then $1,750 and $1,800.
Investors are now awaiting results of a European Central
Bank policy meeting. The bank is expected to leave interest
rates unchanged, waiting to show its mettle with a new
The euro zone debt crisis was back in focus, with the euro
under pressure from fresh speculation that Spain is not in a
hurry to request financial aid.
Greece's government voted by a razor thin margin on Thursday
to approve an austerity package needed to unlock vital aid and
avert bankruptcy, despite an internal rift and violent protests
at the gates of parliament.
"The Greeks managed to narrowly pass their initial austerity
vote overnight, but the main budget vote is this weekend and
that needs to be passed for the EU bailout to happen," Marex
Spectron said in a note.
"So the euro woes remain for the time being, which will once
again create uncertainty in the FX markets, with the effects
affecting precious metals."
INDIAN DEMAND HURT BY HIGH PRICES
Gold importers in India, the world's biggest buyer, held off
buying on Thursday as a weaker rupee kept prices in the vicinity
of their highest level in a month.
The festival season in India will peak with Diwali next
week, with weddings also slated to continue till December.
China's gold demand is expected to grow 1 percent this year
to a record of around 860 tonnes, the global head of metals at
consultancy Thomson Reuters GFMS said on Thursday, with both
jewellery and investment sales rising.
That increase means China will overtake India as the world's
biggest consumer of gold for the first time on a yearly basis,
Philip Klapwijk told the online Reuters Global Gold Forum.
"China will overtake India.... both in overall demand terms
and as the world's largest jewellery market," he said.
South Africa's gold output fell 11.1 percent in volume terms
in September while total mineral production dropped 8.3 percent
compared with the same month last year, Statistics South Africa
data showed on Thursday.
Platinum output, which has been hit heavily by strike action
this year, fell 17.8 percent. South Africa is the source of
around three-quarters of the world's platinum supply.
In other precious metals, spot platinum was up 0.02
percent at $1,539.24 and spot palladium fell 0.04 percent
Silver rose 0.25 percent to $31.84 an ounce.