PRECIOUS-Gold fights to hold ground above key level, Fed in focus

Wed Jan 30, 2013 12:25pm IST

* Gold tries to stand steady above 200-day moving average
    * Asia physical gold buying slow
    * Spot gold to hover around $1,662 before rising again
-technicals
    * Coming up: Federal Open Market Committee policy decision;
1915 GMT

 (Adds comment; updates prices)
    By Rujun Shen
    SINGAPORE, Jan 30 (Reuters) - Gold fought to hold steady
above a key technical level on Wednesday, after snapping a
four-day slide in the previous session on hopes the U.S. Federal
Reserve would opt to continue with monetary stimulus.
    The central bank is expected to confirm in a statement at
1915 GMT that it will keep up $85 billion in monthly bond buying
until unemployment rates drop significantly, although officials
have shown concern over side effects from such measures.
 
    Investors are also waiting for nonfarm payrolls data on
Friday for a close look at the U.S. labour market. Economists
surveyed by Reuters expect steady hiring from employers in
January, helping unemployment to stand unchanged from a month
earlier at 7.8 percent. 
    Recent data showing signs of a steady economic recovery has
depressed sentiment towards gold, a safe haven popular in times
of economic and political distress. 
    "In the short term, gold will struggle because the U.S. data
will continue to be pretty good," said Jeremy Friesen, commodity
strategist at Societe Generale in Hong Kong.
    But he added that the global inflation outlook is firming
due to ultra-loose monetary policies adopted by central banks in
key economies, which will benefit gold as an inflation hedge.
    "Growth looks better so the market is shifting out of risky
low-yield asset or zero-yield assets to equities, but inflation
concerns are opposing that and may be sustaining some interest
in gold."
    Rising oil prices may also stoke worries about inflation.
Benchmark Brent crude matched a more than three-month
high hit the session before. 
    Spot gold had edged up 0.2 percent to $1,666.44 an
ounce by 0619 GMT. It rose above the key 200-day moving average
in the previous session, which stood just below $1,663.
    U.S. gold was up 0.3 percent at $1,666.
    Reuters market analyst Wang Tao said that technical analysis
suggested spot gold may hover around $1,662 an ounce for one
session or retrace moderately before climbing again towards
$1,669. 
    
    
    Purchases in Asia's physical market were slow, as buyers
that beefed up their inventories earlier in the month moved to
the sidelines, waiting for clear direction in prices. 
    "We see some buying from Shanghai, but overall the volume is
small," said Peter Fung, head of dealing at Wing Fung Precious
Metals in Hong Kong. "There is no direction and gold will remain
in a range between $1,620 and $1,700."
    A recent rise in U.S. Treasury yields helped weigh on gold
sentiment as investors unwind their safe-haven buying, Fung
added. 
    In other metals, spot platinum rose 0.4 percent to
$1,682.24, headed for a second straight session of gains,
shrugging off news that Anglo American Platinum, the
world's top platinum producer, has delayed job cuts to allow
time for talks with the South African government and unions.
 
    Spot silver was flat at $31.38.
    India's silver jewellery exports are expected to jump up to
30 percent this year as world demand picks up, said India's Gems
and Jewellery Export Promotion Council. 
 
      Precious metals prices 0619 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1666.44    2.99   +0.18     -0.48
  Spot Silver        31.38    0.00   +0.00      3.63
  Spot Platinum    1682.24    7.00   +0.42      9.59
  Spot Palladium    749.85    2.38   +0.32      8.36
  COMEX GOLD FEB3  1666.00    5.20   +0.31     -0.58         4138
  COMEX SILVER MAR3  31.41    0.22   +0.71      3.89         3490
  Euro/Dollar       1.3482
  Dollar/Yen         90.91
  COMEX gold and silver contracts show the most active months
 
 (Editing by Joseph Radford)

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