February 12, 2014 / 11:41 AM / 4 years ago

PRECIOUS-Gold flat; technical momentum, Fed hopes seen supporting

* Bullion takes breather after three days of rallies
    * Gold breaks above trend line with more gains seen
    * SPDR Gold Trust ETF posts inflow again
    * Coming up: U.S. retail sales, weekly jobless claims Thurs

 (Adds comment, second byline, dateline, updates market
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Feb 12 (Reuters) - Gold prices ended little
changed on Wednesday on profit-taking after rising to a
three-month high near $1,300 an ounce underpinned by technical
buying and hopes that the Federal Reserve will continue its
measured tapering of bond purchases.
    The bullion market took a breather after three consecutive
days of sharp gains, after incoming Fed Chair Janet Yellen made
it clear she would not make any abrupt changes to the U.S.
central bank's commitment to gradually rein in monetary
    The metal erased earlier gains as investors took profits
after prices failed to extend gains above the $1,300 resistance,
traders said.
    A possible bullish double-bottom technical pattern and a
breach of the trend line connecting highs in late August and
early November on gold's weekly chart triggered buying, said
Rick Bensignor, head of trading strategy at Wells Fargo
Securities in New York. (Click for graphic: link.reuters.com/qax76v)
    "There is a potential double bottom in place, and the
near-term trend line has broken to the upside. Gold can probably
rise to between $1,350 and $1,375 in the next several weeks" if
it can breach $1,300, said Bensignor.    
    Spot gold was up 0.2 percent to $1,293.55 by 2:58
p.m. EST (1958 GMT), after hitting a three-month high at
    U.S. COMEX gold futures for April delivery settled up
$5.20 at $1,295 an ounce, with trading volume about 30 percent
below its 30-day moving average, preliminary Reuters data
    Bullion's nearly 1.5 percent rally on Tuesday reversed its
recent strong inverse link with equities, which have been
pressured by economic uncertainties and emerging-market jitters.
On Wednesday, the S&P 500 index eased 0.1 percent.
    Gold usually holds an inverse correlation with the direction
of equities as risk appetite detracts interest from the metal,
regarded as a safe haven. 
    Gold has gained around 7 percent since the beginning of the
year, propped up by concerns about emerging markets and about
economic growth in China. It fell 28 percent in 2013, snapping a
12-year run of gains, as the Fed looked set to unwind its
bond-buying stimulus, which had supported prices.
    Investors have been cautiously moving back into the precious
metal as seen in flows into SPDR Gold Trust, the world's
largest gold-backed exchange-traded fund.
    Holdings in the ETF rose 1.80 tonnes to 798.85 tonnes on
Tuesday. The fund, which lost around 500 tonnes in 2013, has not
recorded any outflows in three weeks. 
    Physical buying from China, the world's top bullion
consumer, where demand has been robust due to the Lunar New Year
holiday, could ease after the recent rally in prices, analysts
    Among other precious metals, silver dropped 0.2
percent to $20.19 an ounce. Platinum was up 1.7 percent
at $1,404 an ounce, while palladium gained 1.4 percent to
$724.90 an ounce.
 2:58 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1295.00   5.20   0.4  1283.90 1296.40  100,296
 US Silver MAR  20.341  0.188   0.9   20.080  20.390   57,699
 US Plat APR   1407.30  19.50   1.4  1385.00 1408.80    8,730
 US Pall MAR    729.05  12.70   1.8   716.50  729.90    4,716
 Gold          1291.50   0.04   0.0  1284.30 1295.91         
 Silver         20.190 -0.040  -0.2   20.120  20.380
 Platinum      1404.00  23.10   1.7  1388.25 1406.50
 Palladium      724.90  10.00   1.4   720.25  729.00
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        107,913   160,617   185,259     16.72   -0.39
 US Silver       84,841    46,103    56,476      24.7    0.13
 US Platinum      9,104    10,808    13,297     18.36   -1.01
 US Palladium     5,736     5,238     5,598     17.93    0.07

 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Keiron Henderson, David Evans and James Dalgleish)
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