October 23, 2013 / 3:17 AM / in 4 years

PRECIOUS-Gold near 4-week highs on hopes U.S. will keep stimulus

* Gold steady after previous session's near 2 pct gain
    * Prices could be supported by delay in tapering -analyst
    * SPDR fund sees inflow of 6.6 tonnes 

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Oct 23 (Reuters) - Gold traded near its highest
in four weeks on Wednesday after tepid U.S. jobs data bolstered
hopes that the Federal Reserve will maintain stimulus policies
supportive of bullion prices. 
    U.S. nonfarm payrolls in September increased by a
lower-than-expected 148,000, raising fears about economic
recovery amid a budget battle in Washington. 
    Spot gold eased 0.3 percent to $1,335.91 an ounce by
0630 GMT, after rallying nearly 2 percent in the previous
session to $1,344.46 - the highest since Sept. 20. U.S. gold
 was trading near its three-week high.  
    A continuation of the Fed's $85 billion monthly bond
purchases would burnish gold's inflation-hedge appeal. 
    "Gold prices will hold at this level because of poor jobs
data and possible delay in tapering until next year," said Helen
Lau, an analyst at UOB Kay Hian Securities in Hong Kong.
    "The reason why they will postpone tapering is because the
Fed needs reliable jobs data to make their decision and this
data will be distorted temporarily by the October shutdown."
    The jobs data on Tuesday indicated that the economy was
losing its momentum even before a 16-day shutdown earlier this
month that will likely dampen October numbers. Fed officials
have said they need to see strong recovery in the labour market
before they begin any tapering. 
    Most U.S. primary dealers polled by Reuters on Tuesday
believe the Fed will not start cutting its monthly bond
purchases until March of next year and said the recent
government shutdown and standoff over raising the U.S. debt
ceiling had a significant impact on the Fed's timing.
    Gold premiums in India hit $120 an ounce to London prices on
Tuesday as the domestic market failed to get enough supply to
meet strong festive demand. 
    In China, Shanghai spot prices were trading at
a premium of $7 an ounce.
    Gold demand in China could increase as higher home prices
stoked inflation fears, said Lau of UOB Kay Hian. 
  Precious metals prices 0630 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1335.91   -4.13   -0.31    -20.22
  Spot Silver        22.64    0.01   +0.04    -25.23
  Spot Platinum    1438.99   -5.11   -0.35     -6.25
  Spot Palladium    745.47   -5.53   -0.74      7.73
  COMEX GOLD DEC3  1336.00   -6.60   -0.49    -20.28        13970
  COMEX SILVER DEC3  22.71   -0.08   -0.37    -25.08         4874
  Euro/Dollar       1.3765
  Dollar/Yen         97.38
  COMEX gold and silver contracts show the most active months
 (Editing by Ed Davies and Muralikumar Anantharaman)

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