PRECIOUS-Gold ticks up; headed for biggest weekly drop in 4 weeks

Fri Nov 30, 2012 1:39pm IST

* Spot palladium headed for more than 14-pct monthly rise
    * Spot gold technical signals mixed - technicals
    * Coming up: U.S. CFTC commitment of traders; 1930 GMT

 (Updates prices)
    By Rujun Shen
    SINGAPORE, Nov 30 (Reuters) - Gold edged up on Friday, but
prices were on track for their biggest weekly drop since the
start of the month with an uncertainty about crucial U.S. talks
to avert a fiscal crisis continuing to hit sentiment.
    While gold has recovered from a 1-1/2-week low of $1,705.64
an ounce hit on Wednesday, it has been unable to break a strong
resistance at $1,730 an ounce in a market roiled by conflicting
comments from Washington about the U.S. budget negotiations.
    Top Republican lawmaker John Boehner said on Thursday that
the talks had made little progress, after expressing optimism
about reaching a deal with the White House just a day earlier.
 
    If the parties fail to reach an agreement, $600 billion in
tax hikes and spending cuts - dubbed as the "fiscal cliff" -
will automatically kick off in early January, threatening to
push the world's top economy into recession.
    "Gold is back in its old $1,700-$1,730 range," said Chen
Min, an analyst at Jinrui Futures in the southern Chinese city
of Shenzhen, referring to a range in which gold had traded
earlier this month.
    "On the macro side, the market sees very little direction,
while the 'fiscal cliff' talk poses much uncertainty and risk."
    Spot gold inched up 0.3 percent to $1,729.55 an ounce
by 0739 GMT, headed for a 1.3 percent weekly drop but a 0.5
percent monthly gain.
    U.S. gold was up 0.1 percent at $1,729.70.
    Technical analysis suggested signals were mixed for spot
gold, as it was not clear that a rebound from Wednesday's low
had been completed, Reuters market analyst Wang Tao said.
    
    Holdings of SPDR Gold Trust, the world's biggest
gold-backed exchange-traded fund, stood at a record high of
1,347.018 tonnes, up nearly 11 tonnes in its fourth consecutive
month of rise. 
    
    
    PALLADIUM HEADED FOR FIFTH WEEK OF GAINS
    Spot palladium rose 0.6 percent to $686, on course
for a fifth week of rise and a monthly gain of more than 14
percent, its strongest since December, 2010.
    Concerns about supply and technical buying helped send
palladium to a 2-1/2-month high of $689 on Thursday.
    "It might be a trade of choice for 2013," said a Hong
Kong-based trader. "People don't want to miss it and are
pressured to jump in now."
    Norilsk Nickel, the world's largest producer of palladium
and nickel, expects the palladium market to remain in a deficit
in the next several years largely due to a near depletion of
Russian state supplies. 
    In other precious metals, spot silver inched up 0.2
percent to $34.27, on course for a monthly gain of more than 6
percent.
    Silver prices could revisit record highs next year, but any
gains will depend heavily on a rally in gold fuelling investment
as silver struggles to overcome a soft outlook for supply and
demand, metals consultancy GFMS said on Thursday.
 
    Spot platinum was headed for a rise of more than 3
percent in November.
    In other news, Shanghai Gold Exchange said it will start a
trial run of over-the-counter gold trading on the China Foreign
Exchange Trading System on Dec. 3, allowing banks to trade
amongst themselves and in large volumes.  
    
    Precious metals prices 0739 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1729.55    4.76   +0.28     10.60
  Spot Silver        34.27    0.06   +0.18     23.76
  Spot Platinum    1612.50    4.01   +0.25     15.76
  Spot Palladium    686.00    4.28   +0.63      5.13
  COMEX GOLD DEC2  1729.70    2.50   +0.14     10.40          417
  COMEX SILVER DEC2  34.31   -0.04   -0.13     22.89          358
  Euro/Dollar       1.3016
  Dollar/Yen         82.50
  COMEX gold and silver contracts show the most active months
   

 (Editing by Himani Sarkar)

Monetary Policy Committee

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