July 27, 2012 / 4:27 AM / 7 years ago

PRECIOUS-Gold steady, set for best week since late-May

* Investors eye US GDP data for cues on stimulus
    * Spot gold may drop to $1,601/oz - technicals
    * Coming up: U.S. Q2 GDP; 1230 GMT

 (Adds graphic; updates prices)
    By Rujun Shen
    SINGAPORE, July 27 (Reuters) - Gold held steady above $1,600
an ounce on Friday, on course for its biggest weekly gain in
almost two months, after European Central Bank President Mario
Draghi signalled the bank would do whatever was necessary to
hold the euro zone together.
    Gold in the past few months has moved largely in tandem with
the euro and riskier assets, with a relentless debt crisis in
the euro zone chipping away at bullion's safe-haven appeal and
investors piling into assets perceived safer, such as the
dollar, yen and US Treasuries.
    While gold drew support from firm stock markets and a steady
euro after Draghi's pledge, investors were seen turning their
focus to U.S. gross domestic product data scheduled for later in
the day for fresh trading cues.  
    U.S. GDP likely grew at a 1.5 percent annual rate in the
second quarter, according to a Reuters poll, which would be the
slowest pace since the second quarter of 2011. The data may shed
light on the stance of the U.S. Federal Reserve on further
monetary stimulus. 
    "If the U.S. GDP number falls short of expectations, it
would once again fuel speculations on Fed easing, which would
help gold," said Lynette Tan, an analyst at Phillip Futures in
    Market participants will also keep an eye on Fed's policy
meeting and the key non-farm payrolls data next week. Gold has
been seesawing between $1,530 and $1,630, partly due to the
Fed's ambiguity on further easing. 
    "The market usually gets excited before the non-farm
payrolls data with expectations of more quantitative easing, but
once people realise it is business as usual, prices will
retrace," a Shanghai-based trader said.
    Spot gold inched up 0.1 percent to $1,617.70 an ounce
by 0621 GMT, after rising to a three-week high of $1,621.41 an
ounce on Thursday. 
    Prices were headed for a more than 2 percent gain this week,
the biggest weekly rise since the last week of May.
    U.S. gold futures contract for August delivery edged
up 0.1 percent to $1,616.90.    
    As gold staged its longest winning streak since June,
physical gold selling accelerated, dealers said.
    "We are busy buying scrap from Thailand and Indonesia," said
a Singapore-based dealer, adding that she was asking for a
discount of 80 cents to $1.20 an ounce.
    Other precious metals also held steady.
    Spot silver gained 0.4 percent to $27.60, after
hitting a three-week high of $27.81 in the previous session. It
was on course for a more than 1-percent weekly rise.
    Spot platinum rose 0.6 percent to $1,408.25. Its
discount to spot gold increased to $215.59 an ounce in the
previous session, its deepest since early December.
    In industry news, Barrick Gold Corp and Newmont
Mining Corp, the world's top two gold producers, both
reported a sharp decline in their quarterly profits.
 Precious metals prices 0621 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1617.70    2.31   +0.14      3.45
  Spot Silver        27.60    0.10   +0.36     -0.33
  Spot Platinum    1408.25    8.35   +0.60      1.09
  Spot Palladium    569.62    4.87   +0.86    -12.70
  COMEX GOLD AUG2  1616.90    1.80   +0.11      3.20        12368
  COMEX SILVER SEP2  27.57    0.12   +0.45     -1.24         2042
  Euro/Dollar       1.2294
  Dollar/Yen         78.22
  COMEX gold and silver contracts show the most active months
 (Editing by Himani Sarkar)
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