* Demand for gold bars, coins lifts spot prices
* Gold to consolidate at $1,321-$1,397 -technicals
* Coming up: U.S. weekly mortgage mkt index at 1100 GMT
By Lewa Pardomuan
SINGAPORE, April 17 - Cash gold shrugged off weakening U.S.
bullion futures to jump as much as 1 percent on Wednesday as
buyers snapped up gold bars, coins and nuggets after prices
touched their lowest in more than two years the session before.
But bullion is not out of the woods yet as investors
continued to shift holdings from exchange-traded funds, even as
the upturn in physical buying led to a shortage of gold bars in
Hong Kong and Singapore.
Gold hit a session high of $1,381.80 an ounce and was
standing at $1,370.84 by 0611 GMT, up $3.05. The metal, which
tumbled to $1,321.35 on Tuesday, has fallen about 18 percent so
far this year after an unbroken 12-year string of gains.
"People are actually buying everything, gold bars, gold
coins. People are rushing to get a hand on it. We have a problem
meeting the demand because we are unable to get new supply,"
said Brian Lan, managing director of GoldSilver Central Pte Ltd
"There's a huge backlog. It's the same for silver. So far
sentiment seems to be improving. Even the price has more or less
The purchases pushed up premiums for gold bars in Singapore
to their highest in 18 months at $1.70 an ounce to spot London
prices, but demand from top consumer India was surprisingly low
despite the wedding season.
"India is sleeping. I mean, they are buying some gold but in
small quantities. We don't see a rush even though the price has
come off," said a physical dealer in Singapore.
India celebrates Akshaya Tritiya, a key gold-buying
festival, next month, while the wedding season will continue
until early June. Indian parents typically give gold jewellery
to their daughters when they marry.
U.S. gold futures, which sometimes dictate spot gold
prices, slipped more than 1 percent after investors dumped
holdings of gold-backed exchange-traded funds and as the
contract caught up with a recent sell-off in the cash market.
SPDR Gold Trust, the world's largest gold-backed ETF,
said its holdings fell 0.73 percent to 1,145.92 tonnes on
Tuesday from 1,154.34 tonnes on Monday. Holdings of global gold
ETFs are currently at their lowest since late 2011.
On Monday, spot gold recorded its biggest ever daily fall in
dollar terms - catching gold bulls, speculators and veteran
investors by surprise.
The asset, usually seen as a so-called safe haven, has
failed to capitalise on tensions in the Korean peninsula and has
been hit by uncertainty over the U.S. Federal Reserve's stimulus
Worries are also festering that other indebted euro zone
countries could follow Cyprus' plan to sell bullion reserves to
"Over a 1-6 month time horizon, risks remain to the
downside, given the negative trend and merely neutral
fundamentals," said Credit Suisse in a report. "We are thus
downgrading our 3-month outlook to negative, and expect prices
of $1,300 in three months."
Tokyo gold futures regained strength as the yen weakened,
the Nikkei rebounded and physical gold buying picked up. The
most active contract, currently February 2014, sank to
its lowest since August on Tuesday.
"These days, gold moving by $10 is not really a big thing. I
would think panic selling was over by yesterday, but it's still
not a normal market. People are still sensitive to movements in
the market," said a dealer in Tokyo.
"In Tokyo, we are seeing good physical demand. People are
buying physical gold, kilobars. Physical buyers are looking at
this dip as a chance to buy," said the dealer, who pegged
support at $1,350 an ounce for spot gold.
Precious metals prices 0611 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1370.84 3.05 +0.22 -18.14
Spot Silver 23.24 -0.13 -0.56 -23.25
Spot Platinum 1433.74 -9.76 -0.68 -6.60
Spot Palladium 675.00 -2.50 -0.37 -2.46
COMEX GOLD JUN3 1372.10 -15.30 -1.10 -18.12 39311
COMEX SILVER MAY3 23.24 -0.39 -1.64 -23.12 11786
COMEX gold and silver contracts show the most active months