February 10, 2014 / 11:21 AM / 6 years ago

PRECIOUS-Gold rises ahead of testimony from Fed Chief Yellen

* Worries over US debt-ceiling talk also underpin gold
    * China 2013 demand tops 1,000 tonnes for the first time
    * Palladium approaches major moving averages on chart
    * Coming up: Yellen appears before US House Tuesday

 (New throughout, updates prices, adds background)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Feb 10 (Reuters) - Gold rose on Monday as
worries about weak U.S. labor market data had some investors
betting that Federal Reserve Chair Janet Yellen may signal a
pause in the central bank's efforts to wind down its bond-buying
    But gold's rise did not carry it past $1,278, which was
close to a three-month high. Technical signals indicate gold
could slide later this week unless Yellen delivers a positive
surprise during her testimony before Congress, said Frank
McGhee, head precious metals dealer at Chicago commodities
brokerage Alliance Financial LLC.
    "Gold is currently right up against hard resistance on
charts. Unless there is a positive surprise that is way out of
the ordinary from Yellen's testimony, I expect it to pull back
later this week," McGhee said.  
    Investors will be watching Yellen's first testimony as Fed
Chief to U.S. lawmakers. The Fed has started to wind down the
bond purchases, or quantitative easing, that has encouraged
investments in gold and other commodities. 
    But some gold investors bet the Fed may grow more cautious
after data last week showed U.S. job creation slowed sharply
over the past two months. 
    Spot gold rose 0.6 percent to $1,274.24 an ounce by
2:56 p.m. EST (1956 GMT), extending last week's 1.9 percent
rise, its largest weekly increase since the week of Jan. 3.
    U.S. COMEX gold futures for April delivery settled up
$11.80 at $1,274.70 an ounce.
    Trading volume was less than 95,000 lots, about half of its
250-day average, preliminary Reuters data showed.
    Last week, gold rose 2 percent after data showed U.S. job
creation slowed sharply over the past two months, fueling
speculation that slowing economic momentum will force the U.S.
central bank to maintain its current level of stimulus.
    Traders said gold was also underpinned by rekindled worries
over congressional gridlock about raising the federal debt
    U.S. equities were little changed late on Monday. Earlier in
the session, gold received a boost as the S&P 500 equities index
 fell on growth worries. 
    In physical markets, consumer demand in China, the world's
biggest bullion consumer, topped 1,000 tonnes for the first time
in 2013, an industry body said on Monday. 
    Among other precious metals, silver was up 0.3
percent to $20.04 an ounce. Platinum edged up 0.1 percent
at $1,380.50 an ounce, while palladium rose 1 percent to
$714.75 an ounce.
    Earlier on Monday, palladium broke above its 50-day moving
averages and was trading near its 100- and 200-day moving
averages. However, it retreated in New York's late afternoon
    Traders said palladium buying was driven by expectations of
better auto demand after heavy selling earlier this year on
Chinese growth worries.

 2:56 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1274.70  11.80   0.9  1264.70 1277.80   87,663
 US Silver MAR  20.112  0.176   0.9   19.960  20.275   42,659
 US Plat APR   1385.90   6.70   0.5  1379.10 1394.60    6,667
 US Pall MAR    716.75   7.95   1.1   708.85  722.25    4,088
 Gold          1274.24   7.66   0.6  1265.73 1277.70         
 Silver         20.040  0.060   0.3   20.000  20.270
 Platinum      1380.50   1.25   0.1  1382.25 1392.00
 Palladium      714.75   7.00   1.0   712.25  721.50
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold         92,326   166,401   185,409     17.39    0.34
 US Silver       58,431    45,064    56,275     23.24   -2.03
 US Platinum      7,143    10,943    13,290     18.43   -0.20
 US Palladium     5,602     4,778     5,596     18.19   -0.17
 (Additional reporting by A. Ananthalakshmi in Singapore;
editing by Keiron Henderson, Chizu Nomiyama and David Gregorio)
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