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PRECIOUS-Gold ticks up on weaker equities, dlr; technical support helps
December 12, 2013 / 4:55 AM / 4 years ago

PRECIOUS-Gold ticks up on weaker equities, dlr; technical support helps

* Asian shares at 2-1/2 mth low, dlr index at 6-wk trough
    * Gold's short-covering gains not sustainable - trader
    * Coming up: U.S. weekly jobless claims, retail sales

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Dec 12 (Reuters) - Gold inched up on Thursday as
some safe-haven bids emerged after equities and the dollar
dropped on fears over an early end to the Federal Reserve's
monetary stimulus.
    Although gold will also hurt from a stimulus tapering,
prices are finding strong technical support at the
$1,250-an-ounce level, which the metal had reached earlier this
week on strong short-covering.
    Spot gold was up 0.3 percent at $1,254.86 an ounce by
0736 GMT, not too far from a three-week high of $1,267.26. 
    Many believe the recent gains - about 2 percent so far this
week - will not be sustainable, especially with a Fed policy
meeting looming.
    "The short-covering gains will not hold as we haven't seen
any follow-through buying by funds based on fundamentals," said
a precious metals trader in Hong Kong.  
    "With the tapering coming up, it is not wise to build up
your metals position."
    Strong economic data this year has prompted Fed officials to
believe that they could begin tapering the central bank's $85
billion in monthly bond purchases. However, the exact timing has
not been decided.
    The Fed holds its final policy meeting of the year next week
and markets believe the agreement on the U.S. budget reached
earlier this week could make it comfortable enough to start
cutting back stimulus immediately. 
    Asian shares slipped to a 2-1/2 month low on Thursday, while
the U.S. dollar was dangling near a six-week low against a
basket of major currencies on those fears.  
    Outflows from gold-backed funds continued with SPDR Gold
Trust, the world's largest gold ETF, losing 2.10 tonnes on
Wednesday. 
    The ETF now holds 833.61 tonnes of bullion - its lowest
since early 2009.
    U.S. data on jobless claims and retail sales later in the
day could set the tone for prices heading into the Fed meeting
on Dec. 17-18.
    
    PRICES AT 0736 GMT
 Metal               Last      Change   Pct chg   YTD pct chg
                                                                
 Spot gold            1254.86     3.51      0.28          -25.06
 Spot silver             20.3     0.03      0.15          -32.96
 Spot platinum        1385.25      5.5       0.4           -9.76
 Spot palladium         732.4    -2.85     -0.39            5.84
 Comex gold Dec3       1254.5     -2.7     -0.21          -25.14
 Comex silver Dec3      20.32   -0.036     -0.18          -32.96
 Euro                  1.3797                                   
 DXY                   79.877                                   
                                                                
 COMEX gold and silver contracts show the most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Richard Pullin,
Joseph Radford and Sunil Nair)

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