November 9, 2011 / 2:51 AM / 7 years ago

PRECIOUS-Gold steadies, Italy's debt worries linger

* Gold still eyes $1,823-$1,829 range 
    * Coming Up: U.S wholesale inventories Sep; 1500 GMT

 (Updates prices, adds quotes)	
    By Lewa Pardomuan	
    SINGAPORE, Nov 9 (Reuters) - Gold steadied on Wednesday on
fears the euro zone debt crisis could engulf Italy even after
Prime Minister Silvio Berlusconi said he would resign, paving
the way for a new leader to act more aggressively to tackle the
country's debt problems.	
    Berlusconi said he would leave office after parliament
approved a budget law that included reforms demanded by Europe
as a failure by Italy, the euro zone's third largest economy, to
fix its debt problems, would have a far bigger impact on the
region than difficulties in Greece. 	
    Gold added 0.15 percent to $1,787.50 an ounce by 0639
GMT, but was off Tuesday's high of $1,802.60, its strongest
since late September, as investors were cautious over the
success of Europe's efforts to tamp down its debt crisis.	
    "There's a little bit of buying from investors," said Ronald
Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"There's not much sale of scrap, I must say. I think people
still need some gold in hand."
    Gold, which hit a record around $1,920 in September on the
euro zone debt crisis, could challenge recent highs after
European Union finance ministers failed to make progress on ways
to shore up sagging banks and avert a credit squeeze.
    Italy's Berlusconi became the biggest political casualty of
Europe's debt crisis on Tuesday when he announced he would step
down after being stripped of his majority in parliament.
    "Are we still going to see the political willpower to
resolve Italy's challenges? I think that is necessary before we
can see a sustainable risk rally," said Ong Yi Ling, an analyst
at Phillip Futures in Singapore.	
    "For now, I don't think we are entirely out of the woods 
yet. I am looking for gold supported above the $1,750 level.
Resistance is at $1,800. Yes, I think longer-term we remain
bullish on gold."	
    Holdings of the largest gold-backed exchange-traded-fund
(ETF), New York's SPDR Gold Trust , gained 0.67 percent
from Monday to Tuesday, while those of the largest silver-backed
ETF, New York's iShares Silver Trust , dipped 0.12 percent
for the same period. 	
    "Europe is approaching the end game -- credit markets and
other governments know what its leaders won't admit -- the euro
is failing," said Peter Morici, an economist at the University
of Maryland business school. 	
    "And then gold, more than the dollar, is set to rocket in
value as the crisis unfolds. A massive bailout from Germany with
contributions from France and smaller northern states will
ultimately be needed, or Italy would follow Greece into
    U.S. gold GCcv1 fell 0.54 percent to $1,789.50 an ounce. 	
    Shares in Asia rallied and the euro held steady after
Italy's prime minister said he would resign, but the financial
market also turned its attention to the latest reading on the
Chinese economy. 	
    China's annual rate of inflation eased to 5.5 percent in
October, the third straight month of decline from a three-year
high of 6.5 percent hit in July and in line with analyst
    But rising gold consumption in China, the world's
second-largest consumer after India, showed inflation remains a
    China's gold consumption is expected to jump nearly 50
percent to reach 400 tonnes this year, the China Securities
Journal reported on Wednesday, citing China Gold Association
President Sun Zhaoxue. 	
    In the energy market, Brent crude gained for a fifth day on
Wednesday, to stand above $115 a barrel, as positive Chinese
inflation data soothed fears of a sharp slowdown in the world's
second largest oil consumer. 	
  Precious metals prices 0639 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1787.50    2.65   +0.15     25.93
  Spot Silver        34.90   -0.02   -0.06     13.09
  Spot Platinum    1659.49    0.99   +0.06     -6.11
  Spot Palladium    671.97    3.98   +0.60    -15.95
  TOCOM Gold       4457.00  -39.00   -0.87     19.52        48821
  TOCOM Platinum   4165.00   12.00   +0.29    -11.31        13914
  TOCOM Silver       86.40   -0.20   -0.23      6.67          633
  TOCOM Palladium  1690.00   25.00   +1.50    -19.41          305
  COMEX GOLD DEC1  1789.00  -10.20   -0.57     25.86        12090
  COMEX SILVER DEC1  34.93   -0.23   -0.65     12.88         3024
  Euro/Dollar       1.3823
  Dollar/Yen         77.57
  TOCOM prices in yen per gram. Spot prices in $ per ounce.
  COMEX gold and silver contracts show the most active months
 (Editing by Clarence Fernandez)
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