* Spot gold holds near 200-day moving average
* Bullion posts two-day rise despite economic optimism
* Palladium-backed fund shows hefty outflow; prices up
* Coming up: U.S. GDP data Thursday
(Updates market activities)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Aug 27 Spot gold edged up on
Wednesday as a lower dollar and lingering geopolitical tensions
helped offset selling pressure from a record rally in U.S.
The dollar softened as traders focused on riskier assets,
while speculation the European Central Bank will resort to
monetary stimulus also triggered some interest in bullion,
On Wednesday, Ukraine accused Russian forces of launching a
new military incursion across its border, a day after the
leaders of both countries agreed to work toward ending a
separatist war in the east of the country.
"The numerous sources of geopolitical crisis are evidently
preventing the gold price from slumping," said Eugen Weinberg,
head of commodity research at Commerzbank.
He said gold was currently trading around a key technical
support at its 200-day moving average near $1,285 an ounce, but
a possible dollar rally and rising U.S. equities could still
pressure bullion prices.
Spot gold was up 0.1 percent at $1,282.36 an ounce by
3:33 p.m. EDT (1933 GMT).
U.S. COMEX gold futures for December delivery
underperformed spot, settling down $1.80 an ounce at $1,283.40.
Trading volume stood at only 72,000 lots, about half of its
30-day average, preliminary Reuters data showed.
The yellow metal posted a second consecutive day of gains.
S&P 500 equities index was little changed, hovering just
below its record high at above 2,005 reached in the previous
Gold was also supported after German consumer sentiment
showed its biggest drop in more than three years.
Also underpinning was ECB President Mario Draghi's call last
week for more action on both the monetary and fiscal fronts.
Holdings of the SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund and a gauge of investor demand,
fell 0.4 percent to 797.09 tonnes on Monday from 800.08 tonnes
Among other precious metals, silver was up 0.3
percent at $19.40 an ounce, while platinum climbed 0.1
percent to $1,411.60 an ounce, and palladium was up 0.9
percent at $888.97 an ounce.
Exchange-traded funds backed by palladium showed significant
outflows. Data on Tuesday from ETF Securities showed holdings of
its UK-listed palladium exchange-traded product fell by 120,625
ounces, or 45 percent of its London-vaulted reserves.
Analysts said year-round active palladium buying in a tight
physical market helped absorb the sizable volume of the metal
brought onto the open market after the ETF outflow.
3:33 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold DEC 1283.40 -1.80 -0.1 1280.90 1288.20 62,314
US Silver SEP 19.405 0.019 0.1 19.285 19.475 39,243
US Plat OCT 1419.90 0.30 0.0 1417.20 1425.50 5,558
US Pall SEP 893.90 5.20 0.6 884.50 893.95 5,351
Gold 1282.36 1.72 0.1 1280.40 1287.50
Silver 19.400 0.060 0.3 19.340 19.500
Platinum 1411.60 1.00 0.1 1418.30 1422.50
Palladium 888.97 7.77 0.9 885.90 892.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 72,265 143,664 155,471 13.71 -0.11
US Silver 75,388 54,802 58,699 17.06 -0.60
US Platinum 5,762 8,993 12,365 13.17 -0.44
US Palladium 13,652 8,718 5,924 18.27 0.37
(Additional reporting by Lewa Pardomuan in Singapore; editing
by Jane Baird, David Evans, Tom Brown and Matthew Lewis)