August 10, 2012 / 4:25 AM / 7 years ago

PRECIOUS-Gold up as weak Chinese data boosts stimulus hopes

* Gold lifted by hopes of China stimulus after weak data
    * Inflation worries brew as corn record high on USDA data
    * Gold investors wait for signals from Fed, ECB
    * Coming Up: U.S. Federal budget for July; 1800 GMT

 (New throughout, changes byline, dateline changed to NEW YORK
from LONDON)
    By Frank Tang
    NEW YORK, Aug 10 (Reuters) - Gold rose on Friday, and is on
track to post a gain for the week, as disappointing Chinese
trade and new bank-lending data suggested policymakers there may
need urgent action to boost sputtering growth in the world's
second-largest economy.
    The precious metal also received a boost from simmering
inflation worries as corn futures rose to an all-time high after
the U.S. government slashed the size of the crop in the world's
top grain exporter. 
    Corn futures later turned lower on ideas the record high
prices will hurt demand.
    Bullion broke ranks with declines in U.S. equities after
Chinese data showed July exports rose just 1 percent from a year
ago and that new loans were at a 10-month low, adding to
Thursday's data showing factory output rising at its lowest pace
in three years. 
    "Gold is up mainly because of the weak manufacturing numbers
in China, suggesting that there is a pretty strong indication we
are going to see more quantitative easing there," said Jeffrey
Sica, chief investment officer at SICA Wealth Management, which
has over $1 billion in assets.
    Spot gold rose 0.3 percent to $1,621.66 an ounce by
11:36 a.m. EDT (1536 GMT), rebounding from a low from earlier in
the session at $1,605.20.
    The metal was on track for a weekly gain of 1 percent
largely on hopes for stimulus measures by China after Thursday's
lackluster factory data. 
    U.S. gold for December was up $4.40 at $1,624.60 an
ounce. Trading volume was on track to finish below its 30-day
average but still set for its highest level for the week,
preliminary Reuters data showed.
    The U.S. Department of Agriculture on Friday slashed its
estimate of corn production in the United States this year as
the worst drought in 56 years devastated the crop, pushing
prices to a record high. 
    Sica said, however, rising food commodity prices could hurt
rather than help gold prices because they prompted the Federal
Reserve to be more vigilant on keeping inflation under control. 
    The next major event for the gold market is likely to be the
annual meeting of economists and central bankers in Jackson
Hole, Wyoming.
    Uncertainty over whether the U.S. Federal Reserve and
European Central Bank will take further steps to boost their
economies has so far deterred a stronger move in gold prices,
and bullion remains below last September's record high at around
$1,920 an ounce.
    Markets also have been pinning hopes on the possibility the
ECB will start buying sovereign bonds to lower borrowing costs
in debt-stricken countries such as Spain and Italy.
    Among other precious metals, silver inched up 1 penny
at $28.11 an ounce, while platinum fell 0.6 percent to
$1,396.74 and palladium lost 0.7 percent to $576.72.
    The unusual spread between the much-more scarce platinum and
gold now stood at an all-time high at nearly $230 an ounce.
 Prices at 11:36 a.m. EDT (1536 GMT)                           
                               LAST      NET    PCT     YTD
                                         CHG    CHG     CHG
 US gold                    1624.60     4.40   0.3%    3.7%
 US silver                   28.095   -0.002   0.0%    0.6%
 US platinum                1401.00   -11.80  -0.8%    0.1%
 US palladium                579.45    -7.25  -1.2%  -11.7%
 Gold                       1621.66     4.57   0.3%    3.7%
 Silver                       28.11     0.01   0.0%    1.5%
 Platinum                   1396.74    -8.86  -0.6%    0.3%
 Palladium                   576.72    -4.08  -0.7%  -11.6%
 Gold Fix                   1618.50    10.00   0.6%    2.8%
 Silver Fix                   27.88   -14.00  -0.5%   -1.1%
 Platinum Fix               1399.00     3.00   0.2%    1.3%
 Palladium Fix               578.00     2.00   0.3%   -9.1%

 (Additional reporting by Siliva Antonioli in London; Editing by
Bob Burgdorfer)
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