Gold inches towards near two-week high

SINGAPORE Wed Jan 16, 2013 9:49am IST

An employee arranges jewellery at a window display in a shop at the Gold Souq in Dubai, January 10, 2013. REUTERS/Ahmed Jadallah/Files

An employee arranges jewellery at a window display in a shop at the Gold Souq in Dubai, January 10, 2013.

Credit: Reuters/Ahmed Jadallah/Files

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SINGAPORE (Reuters) - Gold inched up on Wednesday towards a near two-week high hit in the previous session on expectations easy global monetary policies will continue, while platinum took a breather after rising for six straight sessions to a three-month peak.

Spot gold was headed for a third straight session of gains, encouraged by dovish comments from two U.S. Federal Reserve officials supporting the central bank's ultra-monetary policy.

Monetary stimulus by the world's key central banks helped gold rise for a twelfth straight year in 2012, as investors sought to park their value in hard assets with worries that central banks' cash-printing would debase the value of paper currencies.

Spot gold inched up 0.2 percent to $1,682.44 an ounce by 0307 GMT, just off Tuesday's high of $1,684.90.

U.S. gold was little changed at $1,682.60.

The chart outlook for gold brightened after it broke a resistance level of $1,678 an ounce, which had pressured prices for the past week or so, and prices are expected to rise to $1,701 an ounce, said Reuters market analyst Wang Tao.

But gold's short-term strength could be capped by the lack of liquidity in the market, said Li Ning, an analyst at Shanghai CIFCO Futures.

"Technicals and fundamentals are both supportive of gold, but we are missing the flow of liquidity," she said, referring to a more than four-month low in net long positions in U.S. gold futures and options.

"If we see investors pour more money into this market, it will help confirm the upward trend."

Benchmark gold futures contract on the Tokyo Commodity Exchange hit a record high of 4,828 yen a gram, extending its record-hitting rally into the third session.

Spot platinum fell 0.6 percent to $1,667.61, taking a pause from a six-day winning run that lifted prices by 8 percent and took it above gold for the first time since early last year on Tuesday.

"We saw some longs taking profit last night and this morning," said a Singapore-based trader, adding that heavy selling on TOCOM contributed to the price slide.

TOCOM platinum rose to an intra-day high of 4,913 yen a gram, its highest since May 2011.

But over the short to medium term, platinum may push higher on the supply concern triggered by top producer Anglo American Platinum's (AMSJ.J) plan to close mines and cut jobs, he added.

Spot palladium dropped 0.6 percent to $703.95 an ounce, easing from Tuesday's intra-day high of $717.50, a level unseen since early March, 2012.

(Editing by Muralikumar Anantharaman)

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