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PRECIOUS-Gold gains on Japan policy; firm equities may weigh
April 10, 2013 / 3:50 AM / 5 years ago

PRECIOUS-Gold gains on Japan policy; firm equities may weigh

* Gold faces resistance at $1,590 -technicals
 
    * Coming up: FOMC releases minutes; 1800 GMT

 (Updates prices)
    By Lewa Pardomuan
    SINGAPORE, April 10 (Reuters) - Gold edged up on Wednesday
as Japan's aggressive monetary easing policy boosted bullion's
appeal as a hedge against inflation, although gains may be
capped as stronger equities lure buyers seeking better returns.
    Investors are shifting their focus to minutes from the last
U.S. Federal Reserve monetary policy meeting for insight on the
Fed's bullion-friendly bond buying programme, which sent prices
to an 11-month high in October last year.  
    Gold had gained $2.14 an ounce to $1,586.84 by 0610
GMT, after hitting $1,590 on Tuesday, its highest since April 2.
It has slipped around 5 percent so far this year, after posting
annual gains in the past 12 years.       
    "What the Fed actually releases in the minutes tonight will
affect the direction of gold. Gold needs to test $1,600 before
we see it trading in a higher band. If it doesn't, there might
still be a downside risk," said Brian Lan, managing director of
GoldSilver Central Pte Ltd.
    "Investors will be looking out for any mention of
quantitative easing. The decision on whether the Fed will
continue to print money, limit the print, or slowly ease it out
will definitely drive precious metals prices." 
    Gold futures on Tokyo Commodity Exchange moved
towards a lifetime high at 5,081 yen a gram hit in February
because of a weak yen, but the climb in TOCOM failed to spur
more gains in cash gold. 
    
    Shares edged up in Asia after Wall Street closed at a record
high overnight and Chinese trade data signalled a recovery in
the world's second largest economy was gathering strength, while
the yen remained under pressure. 
     The gain in Tokyo gold futures weighed on bullion bars
offered to investors. Gold bars were at discounts of 75 cents to
spot London prices in Tokyo, versus premiums of 50 cents last
week.
    "We are seeing buyback from the general public," said a
physical dealer in Tokyo, adding that the weaker differentials
attracted buying from local investors.
    "We've read about the missiles, but that isn't having any
impact on the market in Japan," the dealer said, referring to
tensions on the Korean peninsula. 
    South Korea said it has asked China, North Korea's only
major ally, to rein in the hermit state and has raised its
surveillance after the North moved at least one long-range
missile in readiness for a possible launch. 
    U.S. gold for June delivery was steady at $1,587.00 
  an ounce. 
    UBS and Deutsche Bank cut their 2013 gold price forecasts on
Tuesday, with Deutsche lowering its price view by 12 percent to
$1,637 an ounce, saying returns from the metal this year may be
the worst since 2000.  
        
  Precious metals prices 0610 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1586.84    2.14   +0.14     -5.24
  Spot Silver        27.94    0.01   +0.04     -7.73
  Spot Platinum    1542.99   -4.01   -0.26      0.52
  Spot Palladium    725.00    1.50   +0.21      4.77
  COMEX GOLD JUN3  1587.00    0.30   +0.02     -5.30         9983
  COMEX SILVER MAY3  27.90    0.01   +0.05     -7.72         4634
  Euro/Dollar       1.3078
  Dollar/Yen         99.08
 
  COMEX gold and silver contracts show the most active months
 
 
 (Editing by Joseph Radford and Himani Sarkar)

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