PRECIOUS-Gold inches up on steadier euro; platinum hits 3-wk high

Wed Nov 14, 2012 12:48pm IST

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* Possible U.S. fiscal crisis good boost gold's safe-haven
appeal
    * But global demand worries weigh
    * Gold to revisit low of $1,702.59 -technicals
 
    * Coming Up: U.S. Producer price index Oct; 1330 GMT

 (Updates prices)
    By Lewa Pardomuan
    SINGAPORE, Nov 14 (Reuters) - Gold edged up on Wednesday as
the euro steadied against the U.S. dollar, while platinum
extended gains to its highest in three weeks on expectations
that demand could exceed supply this year due to falling output
in South Africa. 
    Concerns about a potential U.S. fiscal crisis could lift
gold's safe-haven appeal, but worries about the impact on global
demand from delays in aid for debt-burdened Greece will keep
prices in check.
     Gold had risen $3.25 to $1,728.14 an ounce by 0658
GMT but was still below a 3-week peak around $1,738 struck on
Friday. Bullion hit a record of about $1,920 in 2011, when
investors turned to the metal as a safe haven as Europe's debt
crisis gathered steam.
    "The next important factor for the market is going to be
Obama's address. The market wants a sense of how the U.S. is
going to proceed in terms of the fiscal cliff," said Nick
Trevethan, senior metals strategist at ANZ in Singapore.
    President Barack Obama is scheduled to hold a news
conference on Wednesday when he will be questioned about
negotiations on the "fiscal cliff" - a convergence of urgent tax
and spending issues that could plunge the economy into another
recession, if mishandled. 
    U.S. gold futures for December added $3.80 an ounce
to $1,728.60.       
    
   
    PLATINUM DEFICIT EXPECTED
    Platinum climbed to $1,597.50, its strongest since
Oct. 23, and was at $1,590.30 an ounce by 0658 GMT.   
    Sister metal palladium marked its strongest since
Oct. 18 at $647.22.
     Supply outages in South Africa are set to push the platinum
market into deficit this year as shipments from the world's main
producer of the metal fall by the equivalent of more than a
month's demand, refiner Johnson Matthey said on Tuesday.
 
    "That assessment is in line with our own modelling in which
we expect a deficit of around 1.95 million ounces this year,
most of which will need to be met by increased scrap supply
given the winding down of Russian stockpile sales," said ANZ's
Trevethan. 
    The bulk of the world's platinum is used by automakers in
autocatalyst systems that scrub exhaust fumes of dangerous and
environmentally damaging chemicals.
    In other markets, shares inched up and the euro steadied on
Wednesday, but investors were still worried about the United
States' looming "fiscal cliff" and the euro zone's intractable
crisis. 
    A weaker dollar makes commodities priced in the greenback
more appealing to holders of other currencies. 
    The physical market lacked activity, with premiums unchanged
in Tokyo at 25 cents below the spot price in London to on par.
     "There's limited selling by the general public, while on
the other hand, sale volumes are also small," said a dealer in
Tokyo, adding that investors could be waiting for gold prices to
slip back to $1,700 before returning to the market.
    Participants in an annual gathering of the London Bullion
Metal Association on Tuesday expected gold to reach $1,843 an
ounce by the time of the next conference in September 2013, and
forecast silver to reach $38.40. 
      
  Precious metals prices 0658 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1728.14    3.25   +0.19     10.51
  Spot Silver        32.65    0.19   +0.59     17.91
  Spot Platinum    1590.30    9.55   +0.60     14.16
  Spot Palladium    644.10   11.38   +1.80     -1.29
  COMEX GOLD DEC2  1728.60    3.80   +0.22     10.33         9278
  COMEX SILVER DEC2  32.65    0.16   +0.50     16.96         2515
  Euro/Dollar       1.2718
  Dollar/Yen         79.72
 
  COMEX gold and silver contracts show the most active months
 

 (Editing by Joseph Radford and Himani Sarkar)

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