September 25, 2013 / 3:56 AM / 6 years ago

PRECIOUS-Gold edges up for second session, physical demand soft

* Gold adds to small gains after 3-day drop
    * Hong Kong premiums stable, physical demand soft -dealers
    * Asian shares slip, dollar gains 

 (Adds central bank buying, updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Sept 25 (Reuters) - Gold ticked up for a second
session on Wednesday, recovering after a 3-percent drop in as
many days, but gains were limited by lacklustre physical demand
and lingering uncertainty over the outlook for U.S. economic
stimulus.
    Bullion has fallen about 20 percent this year - after 12
years of gains - on fears the U.S. Federal Reserve would begin
tapering its $85 billion in monthly bond purchases. Recent
comments by the Fed have caused confusion as to the exact
timing.
    When prices fell sharply in April and June, physical demand
picked up strongly. But with continued volatility in prices and
expectations of further declines, consumers have stayed away.
    "We are seeing very slow demand as people are still
bearish," said Peter Fung, head of dealing at Hong Kong's Wing
Fung Precious Metals. "They are waiting for prices to fall below
$1,300." 
    Premiums over London prices were unchanged from last week. 
    Spot gold had risen 0.3 percent to $1,327.24 an ounce
by 0647 GMT, extending slight gains from the previous day. U.S.
gold climbed 1 percent after a three-day fall.
    Prices were supported by soft U.S. data on gains in home
prices and consumer confidence. They were also helped by data
from the International Monetary Fund that showed central banks
continued to increase gold reserves. 
 
    Top consumer India is expected to see a fresh bout of
purchases after nearly two months as new rules on gold imports
and exports were clarified. 
    Pent-up demand and the upcoming festival and wedding season
could prompt a surge in buying but it is still not expected to
be as much as the record 162 tonnes of imports in May. 
    China, the second biggest gold consumer, is also headed into
a strong buying season but market holidays next week have kept
things quiet.
    Chinese markets will be closed all of next week for the
National Day holiday, when weddings usually kick off.
    "After the holiday, if prices are below $1,300, then we can
see good demand from them," said Fung. 
    
  Precious metals prices 0647 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1327.24    4.65   +0.35    -20.74
  Spot Silver        21.80    0.12   +0.55    -28.01
  Spot Platinum    1431.49   13.19   +0.93     -6.74
  Spot Palladium    720.35    3.35   +0.47      4.10
  COMEX GOLD DEC3  1327.70   11.40   +0.87    -20.77        19686
  COMEX SILVER DEC3  21.83    0.24   +1.11    -27.98         7045
  Euro/Dollar       1.3467
  Dollar/Yen         98.63
 
  COMEX gold and silver contracts show the most active months
 
 (Editing by Michael Urquhart and Joseph Radford)
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