January 29, 2013 / 12:00 PM / 7 years ago

PRECIOUS-Gold rises, ending four-day slide; FOMC eyed

* COMEX open interest down 4 pct, short-covering seen
    * Market awaits Friday's U.S. non-farm payrolls data
    * Palladium eyes $750/oz, highest in 16 months
    * Coming up: US Fed Open Market Committee statement Wed.

 (New throughout, changes byline, dateline, previously LONDON)
    By Frank Tang
    NEW YORK, Jan 29 (Reuters) - Gold rose on Tuesday, snapping
a four-day losing streak, lifted by short-covering and expected
continuation of loose U.S. monetary policies.
    Platinum and palladium also rebounded after Tuesday's drop
as supply worries and hopes for demand recovery triggered strong
fund interest. 
    Bullion climbed a day before a Federal Reserve policy
statement in which the U.S. central bank is expected to keep
short-term interest rates exceptionally low until the U.S.
unemployment rate falls to 6.5 percent, inflation permitting.
    "What's going to come out of the Fed is more of the same, so
we can just anticipate that (quantitative easing) is here at
least for a little while longer," said Jeffrey Sica, chief
investment officer of SICA Wealth, who oversees more than $1
billion in client assets.
    Spot gold rose 0.5 percent to $1,662.04 an ounce by
1:55 p.m. EST (1855 GMT), recovering from Monday's 2-1/2 week
low of $1,651.93. 
    U.S. gold futures for February delivery were up $7.90
at $1,660.80 an ounce, with volume more than 40 percent above
the 250-day average due to the February-April rollover ahead of
February's first-notice day Friday.
    Open interest in COMEX futures dropped 4 percent on Monday
after four consecutive days of price decline, CME data showed,
suggesting some investors were buying back their bearish bets
after the sharp pullback, traders said. 
    A drop in the dollar index and U.S. equities' gain
also boosted gold.
    Loose U.S. monetary policy helped drive gold to a 12th year
of gains in 2012. 
    There has been growing discomfort among U.S. policymakers
about the Fed's bond buying, or quantitative easing (QE),
currently running at $85 billion a month, although analysts do
not expect any imminent change in Fed policy. 
    U.S. non-farm payrolls data on Friday will also be examined
for clues on the state of the world's largest economy.

    Spot silver was up 1.5 percent to $31.28 an ounce
after touching a two-week low of $30.71 in the previous session.
    Silver mirrored gold's rise, and was also underpinned by
reports that India's silver exports are expected to rise by up
to 30 percent this year. 
    Among platinum group metals, platinum rebounded from
a nearly 2 percent fall on Monday, its sharpest daily decline in
more than a month. It was last up 0.9 percent at $1,674.49 an
    Losses in the previous session followed news that Anglo
American Platinum and labor unions in South Africa
agreed to postpone a restructuring involving 14,000 job cuts to
allow for more talks. 
    Spot palladium rallied 1.4 percent to $746.22 an
ounce, having earlier hit a fresh 16-month high of $748.50.
    Market talk about dwindling sales from Russia's state-owned
palladium stockpile and booming auto demand have spurred heavy
buying by hedge funds and momentum traders, analysts said.
 1:55 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold FEB   1660.80   7.90   0.5  1653.50 1665.00  132,112
 US Silver MAR  31.184  0.404   1.3   30.850  31.355   27,860
 US Plat APR   1678.90  16.70   1.0  1662.70 1682.80    8,740
 US Pall MAR    749.75   9.20   1.2   734.30  750.90    4,916
 Gold          1662.04   7.70   0.5  1655.05 1665.66         
 Silver         31.280  0.460   1.5   30.870  31.320
 Platinum      1674.49  15.50   0.9  1665.00 1676.00
 Palladium      746.22  10.50   1.4   736.52  748.50
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        250,493   156,919   174,507     13.42   -0.73
 US Silver       29,528    42,609    53,449     21.81    1.64
 US Platinum      8,991    15,366    10,880     16.45   -0.01
 US Palladium     5,142     3,381     4,805                  
 (Additional reporting by Clare Denina in London and Rujun Shen
in Sigapore; editing by John Wallace)
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