PRECIOUS-Gold steady ahead of possible Greek bailout deal

Thu Nov 22, 2012 1:28pm IST

* Spot silver rises to one-month high; technicals strong
    * Spot gold to break resistance at $1,734/oz -technicals
    * Coming up: euro zone Markit flash PMI; 0858 GMT

 (Adds details; updates prices)
    By Rujun Shen
    SINGAPORE, Nov 22 (Reuters) - Gold traded in a $5 range on
Thursday, supported by central bank purchases and a weaker
dollar as European leaders raised the possibility that a bailout
deal for Greece was imminent.
    Gold, up nearly 11 percent this year on the back of U.S.
monetary easing measures to stimulate its economy, has been
hovering around $1,730 for most of this week as investors focus
on whether the United States will avoid a fiscal crisis.
    But expectations of a looming Greek deal with lenders dented
the dollar against the euro and aided gold prices. News that
Brazil, Kazakhstan and Turkey had all increased their gold
holdings also supported sentiment.
  
    The euro rose to a two-week high versus the greenback after
news of the possible Greek bailout, making dollar-priced
commodities, such as gold, more attractive to buyers using euro
and other currencies. 
    "The market is lacking direction right now and investors
have become increasingly cautious," said Chen Min, an analyst at
Jinrui Futures in the southern Chinese city of Shenzhen.
    "The sentiment is mainly supported by concerns about the
U.S. 'fiscal cliff', which offsets the easing of geopolitical
tension in the Middle East which should have dented gold's
safe-haven appeal."
    Spot gold was little changed at $1,730.10 an ounce by
0739 GMT.
    U.S. gold inched up 0.1 percent to $1,730.10.
    The "fiscal cliff" refers to a $600 billion tax hike and
spending cuts that are due to roll in early next year in the
U.S., if Congress fails to reach an agreement to avert it,
possibly sparking a recession. 
    In the Middle East, Israel and the Islamist Hamas movement
ruling the Gaza Strip agreed on Wednesday to an
Egyptian-sponsored ceasefire to halt an eight-day conflict that
killed 162 Palestinians and five Israelis. 
    Technical analysis suggested that spot gold is poised to
break resistance at $1,734 per ounce and rise more towards
$1,749 during the day, said Reuters market analyst Wang Tao.
 
    
    
    SILVER HITS ONE-MONTH HIGH
    Spot silver rose to $33.43 an ounce, its highest in
more than a month, before easing slightly to $33.31.
    Silver has risen more than 20 percent so far this year,
leading precious metals and dwarfing gold's gains.
    Silver usually tracks moves in gold, but can also be
influenced by riskier assets due to its industrial nature.
    "It's driven by technicals, and gold's resilience is also
supportive," said a Singapore-based trader.
    Technical support could push the metal to $37.53 in the next
four weeks, said Reuters' Wang. 
    
    
      Precious metals prices 0739 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1730.10    1.57   +0.09     10.63
  Spot Silver        33.31   -0.02   -0.06     20.30
  Spot Platinum    1578.37    4.62   +0.29     13.31
  Spot Palladium    647.00    5.50   +0.86     -0.84
  COMEX GOLD DEC2  1730.10    1.90   +0.11     10.42        11487
  COMEX SILVER DEC2  33.32   -0.03   -0.09     19.36         3309
  Euro/Dollar       1.2850
  Dollar/Yen         82.55
  COMEX gold and silver contracts show the most active months
     

 (Editing by Miral Fahmy and Joseph Radford)

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