REFILE-PRECIOUS-Gold up 1 pct on hopes over 'fiscal cliff' talks, Greece

Tue Nov 20, 2012 2:27am IST

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* Signs of progress in U.S. talk over fiscal crisis help
    * Gold near 50-day moving average resistance
    * Middle East tensions underpin safe-haven bids
    * Coming up: U.S. housing starts Tuesday

    By Frank Tang
    NEW YORK, Nov 19 (Reuters) - Gold rose over 1 percent on
Monday as optimism about talks to resolve the U.S. fiscal crisis
and hopes Greece would receive more funding fuelled buying in
bullion, as well as in equities and other commodities.
    The metal has recovered all of last week's losses that were
blamed on fears of a global recession. Silver and platinum group
metals also rose sharply on better demand expectation amid a
brighter economic outlook.
    Gold's inflation-hedge appeal rose on signs that top
Democratic and Republican lawmakers were confident they could
reach a deal to avert automatic tax and spending cuts, which
will come into effect in the new year and could trigger another
recession, analysts said. Five-year Treasury Inflation-Protected
Securities (TIPS) breakeven rate also rose as crude oil rallied
2.5 percent.  
    Monday's better U.S. home resales pointed to a brighter
economic outlook. However, traders said the
economy has not improved enough to justify a tightening in U.S.
monetary policies.
    "Overall, some of the underlying things are only starting to
heal in the economy and it appears that will keep monetary
policy accommodative, which will reflect in higher gold prices,"
said Axel Merk, chief investment officer of Merk Funds, which
has about $600 million in assets under management.
    Spot gold was 1.1 percent higher at $1,732.31 an
ounce by 2:58 p.m. EST (1958 GMT).
    Monday's gains appear set to challenge the key technical
resistance of the 50-day moving average at around $1,742 an
ounce, which bullion has not breached in almost a month.
    Gold also rose on a drop in the dollar against the euro on
positive signs the euro zone would agree next week on two years
of funding for Greece and leave further help to be decided
later. 
    Also underpinning gold is the escalating conflict between
Israel and Hamas in the Gaza strip. Analysts said safe-haven
bids and higher crude oil prices due to geopolitical tensions
are clearly benefiting the metal.
    U.S. COMEX gold futures for December delivery settled
up $19.70 at $1,734.40 an ounce, with trading volume about 25
percent below its 250-day average, preliminary Reuters data
showed.
    Spot silver rose 2.8 percent to $33.10 an ounce.
    
    US FISCAL CRISIS IN FOCUS
    Money managers are buying assets across the board as they
now have a better picture regarding taxes and other White House
policies after the re-election of President Barack Obama, said
George Nickas, commodities broker at INTL FCStone.
    Gold's safe-haven status could shine in the case of failed
talks and political paralysis, analysts said. Extreme fears over
the first fiscal crisis last year and a downgrade of the U.S.
credit rating ultimately sent gold to its record high of
$1,920.30 an ounce in September.
    While the Congress is unlikely to allow tax increases and
spending cuts due to their far-reaching effects, ratings agency
Fitch said the U.S. "fiscal cliff" could trigger a recession and
push the unemployment rate above 10 percent.    
    Platinum group metals also rallied on expectations of better
demand from the auto sector. Platinum rose 1.1 percent to
$1,571.24, while palladium gained 2.6 percent to $643.
 2:58 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1734.40  19.70   1.1  1713.40 1735.50  113,180
 US Silver DEC  33.189  0.819   2.5   32.285  33.215   44,095
 US Plat JAN   1583.80  22.00   1.4  1559.60 1584.70    6,266
 US Pall DEC    645.30  18.85   3.0   626.45  646.25    3,458
                                                               
 Gold          1732.31  18.82   1.1  1714.10 1734.90         
 Silver         33.100  0.890   2.8   32.320  33.210
 Platinum      1571.24  17.24   1.1  1561.00 1580.50
 Palladium      643.00  16.00   2.6   629.00  644.50
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        127,104   153,591   176,348     12.77   -1.19
 US Silver       58,247    44,317    56,113      21.8   -0.55
 US Platinum      6,479     8,864     9,478     18.88   -0.05
 US Palladium     3,920     3,975     4,565
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