November 23, 2012 / 3:20 PM / 5 years ago

PRECIOUS-Gold above $1,750, up 1.4 pct on weak dlr, technicals

* Spot gold breaks above 50 DMA first time in over month
    * Greek aid hopes, German business sentiment hit dollar
    * Heavy buying related to option expiration helps-traders
    * Coming up: U.S. Chicago Fed index Monday

 (Adds market details, graphic link, updates prices)
    By Frank Tang
    NEW YORK, Nov 23 (Reuters) - Gold rose above $1,750 an ounce
for the first time in five weeks on Friday, gaining 1.3 percent,
as a drop in the dollar and options-related buying triggered a
technical breakout.
    After trading slightly higher throughout early U.S.
dealings, gold surged suddenly to above its 50-day moving
average, a key technical resistance it had failed to breach in
more than a month. 
    Analysts said Friday's gains could lead to a test above the
more formidable $1,800 level, which bullion has not seen since
its rally to a record $1,920.30 in September 2011.
   (Gold above key moving averages:
    "It's definitely a technical breakout above the 50-day
moving average for the short term. If we break above $1,800, the
next real significant resistance will be the prior all-time high
near $1,900," said Adam Sarhan, CEO of Sarhan Capital.
    Bullion also tracked higher with U.S. equities as both
markets posted sharp gains in abbreviated sessions after the
Thursday's Thanksgiving holiday. For the week, gold gained 2.3
percent after losing one percent last week.
    Spot gold was up 1.4 percent at $1,752.50 an ounce by
1:56 p.m. EST (1856 GMT).
    U.S. COMEX gold futures for December delivery settled
up $23.20 an ounce at $1,751.40. 
    Trading volume, which included Thursday's brief electronic
dealings, topped 200,000 lots at about 15 percent above its
250-day average, preliminary Reuters data showed.
     Gold out performed other commodities, which also benefited
from a weaker dollar. The U.S. dollar index is down 1
percent on hopes for a Greek aid package and in reaction to a
surprise improvement in German business sentiment. 
    "The dollar here is just getting smacked so hard in a really
thin market, so it's easy for gold and silver to break out of
some key levels without a lot of resistance," said Matthew
Schilling, commodities broker at futures brokerage RJ O'Brien.  
    Silver rose 2.5 percent to $34.10 an ounce. Silver,
which tends to be more volatile than gold, posted a weekly gain
of 5.6 percent, more than doubled bullion's.
    Strong buying related to next Tuesday's expiration of the
popular December COMEX options also lifted gold. Heavy
positioning of the $1,750 and $1,800 strikes in call options
could increase volatility and lift prices, dealers said.
    Price volatility also tends to rise ahead of December's
first-notice day next Friday, traders said.
    Rising open interest in COMEX gold futures suggested that
investors are more inclined to own gold longer, as they switched
their December contracts to February futures before first-notice
day, said George Gero, vice president of RBC Capital Markets.
    Among other precious metals, platinum was up 2.2
percent at $1,614.70 an ounce, while palladium gained 1.2
percent to $662 an ounce.
 1:56 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1751.40  23.20   1.3  1727.60 1755.00  153,370
 US Silver DEC  34.116  0.766   2.3   33.235  34.160   39,517
 US Plat JAN   1617.10  33.20   2.1  1573.40 1626.60    9,099
 US Pall DEC    667.60  16.30   2.5   644.85  669.70    6,124
 Gold          1752.50  23.45   1.4  1729.11 1754.10         
 Silver         34.100  0.820   2.5   33.280  34.130
 Platinum      1614.70  35.30   2.2  1577.30 1620.25
 Palladium      662.00   7.60   1.2   654.00  667.50
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        200,687   155,878   175,537      12.6   -0.22
 US Silver       52,353    47,208    56,158     20.04   -0.05
 US Platinum      9,373     8,699     9,482     17.93   -0.21
 US Palladium     8,623     4,419     4,569                  

 (Additional reporting by Jan Harvey and David Brough in London;
Editing by John Wallace and Bob Burgdorfer)
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