September 14, 2012 / 10:38 AM / 7 years ago

PRECIOUS-Gold posts second day of gains after Fed stimulus

* Bullion's four-week rally first since January
    * Gold could see resistance at major highs $1,790, 1,802
    * S.African mine labor strife adds support to platinum
    * Coming up: U.S. New York State manufacturing index Monday

 (Recasts, updates comments, market activity)
    By Frank Tang
    NEW YORK, Sept 14 (Reuters) - Gold edged up on Friday,
extending the previous session's 2 percent rally to hit a
six-month high after the U.S. Federal Reserve unleashed another
round of bullion-friendly stimulus. 
    Platinum group metals gained sharply on supply worries due
to unrest among South African miners and a better demand outlook
a day after the Fed pledged to pump $40 billion monthly into the
U.S. economy until it saw a sustained upturn in the jobs market.
    Investors looking to gold as a traditional inflation hedge
against monetary stimulus by central banks around the world
pushed bullion up for a fourth straight week for the first time
since January.
    "For gold prices to have extended gains even further,
without the usual 'buy the rumor, sell the fact' pullback, is
impressive," said James Steel, metals analyst at HSBC.
    Steel said that gold's rally is likely to be sustained by
the open-ended nature of the Fed's latest bond-buying program. 
    Spot gold was up 0.2 percent to $1,770.20 an ounce by
3:04 p.m. (1904 GMT) after climbing to an intraday high of
$1,777.51, its loftiest since Feb. 29. 
    U.S. COMEX gold futures for December delivery settled
up 60 cents at $1,772.70 an ounce, with trading volume higher
than average for a second straight day, preliminary Reuters data
    Sentiment in COMEX gold options was positive for a second
straight day, and funds have been buying gold call options and
other bullish plays throughout the session, said COMEX gold
options floor trader Jonathan Jossen.
    Analysts differed on whether gold could keep up the
blistering rally.
    "When multiple major central banks are coordinating their
effort in printing more money and engaging in stimulus measures,
 that has to be overtly bullish for gold," said Adam Sarhan,
chief executive of Sarhan Capital.
    The European Central Bank has unveiled an aggressive plan to
tackle the three-year old euro zone debt crisis, while China's
Premier Wen Jiabao said this week the government could utilize a
massive fiscal stability fund to boost growth.  
    UBS gold strategist Edel Tully said that gold is due to
encounter stiff resistance at an area between $1,790 and $1,803,
the metal's highs from February and November.
    Reuters data shows asset performance has tended to diminish
with each new round of quantitative easing, or QE, from the Fed,
and that it sometimes takes as long as a year for the effects of
Fed action to kick in.
    Among other precious metals, silver was down 0.2
percent at $34.58 an ounce. Platinum gained 1.7 percent
to $1,705.25, while palladium was up 1.5 percent at
$693.97 an ounce. 
    Platinum posted an 8 percent rise on the week, its biggest
weekly gain since last October, due to supply fears caused by
mine labor unrest in South Africa, which is estimated to own 80
percent of the world's platinum reserves.
 3:04 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1772.70   0.60   0.0  1767.70 1780.20  166,127
 US Silver DEC  34.656 -0.122  -0.4   34.320  34.985   50,130
 US Plat OCT   1713.70  34.20   2.0  1680.00 1716.50   15,358
 US Pall DEC    699.30  10.30   1.5   686.25  705.80    5,281
 Gold          1770.20   3.91   0.2  1765.76 1777.51         
 Silver         34.580 -0.060  -0.2   34.330  34.920
 Platinum      1705.25  28.55   1.7  1682.90 1714.00
 Palladium      693.97  10.07   1.5   688.77  702.75
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        177,766   133,535   183,337     18.16   -1.30
 US Silver       52,415    54,258    53,332     33.96   -1.36
 US Platinum     16,920    16,462     9,274      25.1    2.77
 US Palladium     5,584     7,864     4,643                  

 (Additional reporting by Eric Onstad, Rujun Shen in Singapore
and Veronica Brown in London; Editing by David Gregorio and Jim
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