January 22, 2013 / 3:49 AM / 5 years ago

PRECIOUS-Gold edges up as BOJ monetary stimulus supports

* Tokyo gold hits record high after BOJ move
    * Spot gold cautiously bullish - technicals
    * Coming up: U.S. existing home sales, Dec; 1500 GMT

 (Adds details, comments, graphic; updates prices)
    By Rujun Shen
    SINGAPORE, Jan 22 (Reuters) - Spot gold inched up and Tokyo
gold hit a record high on Tuesday after the Bank of Japan, as
expected, took bold steps to stimulate the economy, although a
lack of fresh catalysts may trap bullion within its recent
range.
    The Bank of Japan announced on Tuesday its most determined
effort yet to end years of economic stagnation, saying it would
switch to an open-ended commitment to buying assets next year
and doubling its inflation target to 2 percent. 
    The easing move sent the yen lower initially, before the
currency firmed against the greenback later in the day. Tokyo's
benchmark gold futures contract rose to a record high of
4,913 yen. 
    "We saw some selling right after the BOJ news when yen
weakened initially," said a Tokyo-based trader. "But since the
yen strengthened physical traders have refrained from further
selling."
    High yen-priced gold will still attract some retail selling,
he added.
    Spot gold inched up 0.2 percent to $1,693.46 an ounce
by 0803 GMT, close to a one-month high of $1,695.56 hit last
week.
    U.S. gold gained 0.4 percent to $1,693.30.
    Gold has lacked momentum to break the key resistance of
$1,700 an ounce, despite the BOJ easing and seasonal support
from the physical market.
    "Gold really needs to break above $1,700 and close above
that level to attract short-term buyers, but the momentum has
not built up that much, even when we are right before the Lunar
New Year and physical demand is steady," said Peter Tse,
director at ScotiaMocatta.
    Trading volume on the three gold contracts on the Shanghai
Gold Exchange stood at 28,060.2 kilograms on Tuesday,
down from this year's high of 42,839 kg in early January.
    Trading volume on the gold futures contracts on the Shanghai
Futures Exchange <0#SHAU:> declined to 21,516 contracts, or
21,516 kilograms, on Monday, the lowest since mid-2011.   
    Technical analysis suggested spot gold needs to stand steady
above resistance at $1,694 an ounce to confirm a bullish target
at $1,706, said Reuters market analyst Wang Tao. 
   
    
    
    The much-watched U.S. debt ceiling talks have showed signs
of progress. Republican leaders in the House of Representatives
have scheduled a vote on Wednesday on a nearly four-month
extension of U.S. borrowing limit, but the bill does not specify
a dollar amount. 
    India raised import tax on gold ores and dore bars to 5
percent from 2 percent, following a tax hike on bullion on
Monday, as the government tries to rein in a ballooning current
account deficit. 
    Traders said the move has been largely priced in by the
international market, and the impact on gold consumption would
be limited as higher tariff may trigger more smuggling.
    Spot platinum rose 0.7 percent to $1,685.24, in a
discount to gold for a third straight session after briefly
regaining premium last week.
    
       Precious metals prices 0803 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1693.46    3.91   +0.23      1.13
  Spot Silver        32.04    0.05   +0.16      5.81
  Spot Platinum    1685.24   11.75   +0.70      9.79
  Spot Palladium    717.72    2.72   +0.38      3.72
  COMEX GOLD FEB3  1693.30    6.30   +0.37      1.04        61345
  COMEX SILVER MAR3  32.07    0.14   +0.43      6.09        16513
  Euro/Dollar       1.3360
  Dollar/Yen         89.13
  COMEX gold and silver contracts show the most active months
 
 (Editing by Muralikumar Anantharaman)

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