August 28, 2013 / 9:51 AM / 4 years ago

PRECIOUS-Gold ends mixed, hits 3-1/2 month high on Syria jitters

* Reaches highest since May 14, seen as safe haven
    * SPDR Gold Trust holdings rise
    * Coming up: U.S. Q2 Core PCE Price index, GDP Thursday

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activity)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Aug 28 (Reuters) - The spot gold price
briefly rose above $1,430 an ounce to a three-and-a-half-month
high on Wednesday on safe-having buying as the United States and
its allies looked set to launch military strikes on Syria.
    While U.S. futures settled lower on the day, bullion rose
for a fifth consecutive session as Syrians braced themselves for
what U.S. officials described as plans for multi-national
strikes that could last for days, in response to last week's gas
attack that killed hundreds of civilians in a rebel-held suburb
of Damascus. 
    A one-percent rise in U.S. crude futures on fears that any
action against Syria could widen into a regional Middle East
conflict also increased gold's inflation-hedge appeal. 
    "We are seeing the risk profile for the credit market shift
in favor of gold in the near term until the contour of the Syria
crisis is better understood," said Ed Lashinski, director of
global strategy and execution for RBC Capital Markets' futures
group. 
    Spot gold was up 0.1 percent at $1,416.86 an ounce by
3:29 p.m. (1929 GMT), having earlier hit $1,433.31, its highest
price since May 14.
    U.S. gold futures for December delivery settled down
$1.40 an ounce at $1,418.60, with trading volume about 10
percent below its 30-day average, preliminary Reuters data
showed.
    After tumbling to a three-year low of $1,180 on June 28, the
price of gold has now rallied 21 percent in the last two months.
    Some analysts said gold looks vulnerable to profit taking,
as its 14-day relative strength index (RSI) rose for a fifth day
to 71 on Wednesday. A reading above 70 is considered overbought.
    On Wednesday, the U.S. National Association of Realtors said
its Pending Homes Sales Index fell 1.3 percent in July, a sign
that housing-market weakness might postpone the U.S. central
bank's planned tapering of its $85 billion monthly bond-buying
stimulus. 
    The Fed's monetary stimulus to boost growth in the last
several years has been a major driver behind gold's rally to a
record high $1,920 an ounce in September 2011. 
    
    SPDR GOLD POSTS INFLOW
    As a gauge of investment demand, holdings in the world's
largest gold-backed exchange-traded fund, the SPDR Gold Trust
, gained 29,000 ounces, or 0.1 percent, on Tuesday. 
    Despite recent inflows, bullion held at SPDR Gold Trust is
still near its lowest level since early 2009 and about 30
percent below a record high set in December 2012.
 
    Demand for physical gold in Asia slowed this week as spot
prices surged to three-month highs and emerging market
currencies plunged. 
    The rupee's tumble to a record low against the dollar is
likely to curb demand from India, one of the world's top gold
buyers. Gold prices hit all-time highs in Indian rupee terms
 for a second day on Wednesday.
    Among other precious metals, silver prices dropped
0.7 percent to $24.30. Platinum rose 0.8 percent to
$1,530.70 an ounce, while palladium edged up 0.2 percent
to $743.50 an ounce.

 3:29 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1418.80  -1.40  -0.1  1413.20 1434.00  155,310
 US Silver SEP  24.391 -0.260  -1.1   24.220  25.120   81,931
 US Plat OCT   1540.10   8.00   0.5  1516.00 1546.60   10,837
 US Pall SEP    746.05  -3.10  -0.4   734.90  749.85    6,711
                                                              
 Gold          1416.86   0.82   0.1  1414.13 1433.31         
 Silver         24.300 -0.160  -0.7   24.260  25.080
 Platinum      1530.70  11.90   0.8  1520.50 1543.50
 Palladium      743.50   1.50   0.2   738.77  748.00
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        168,813   180,951   190,193     24.18   -0.69
 US Silver      145,518    58,053    53,341     36.41    1.44
 US Platinum     11,102     9,242    12,448     20.63    0.00
 US Palladium    15,432     5,290     5,354                  
                                                              
 
 (Additional reporting by Clara Denina in London; Editing by
David Cowell, Jane Baird and Alden Bentley)
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