Mon Nov 22, 2010 1:40am EST
* Gold ticks up on euro strength
* Gold seen rangebound, seeks direction[ID:nSGE6AL013]
* Coming Up: U.S. Chicago Fed index Oct; 1300 GMT
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Nov 22 (Reuters) - Gold ticked higher on Monday
as the euro gained after Ireland's rescue deal, helping the
metal resist pressure from China's move to tighten its economy. China's steps to rein in inflation could dim gold's appeal
in the world's second-largest consumer after India, but
dealers said a drop in bullion prices from all-time high
levels were
attracting purchases from other consumers in Asia.
Spot gold added $7.15 an ounce to $1,361.30 an ounce
by 0617 GMT, still well below a lifetime high around $1,424 an
ounce struck in early November. U.S. gold futures for December
delivery rose $8.7 to $1,361 an ounce.
Spot gold is technically neutral as it hovers within a
range
of $1,340-$1,365 per ounce, and a further development of the
chart is necessary to confirm its next directional move,
according to Reuters market analyst Wang Tao.
For a graphic showing the 24-hour gold technical outlook,
see: here
"Gold has dropped from $1,400 and it seems there's buying
interest around at these levels," said Ronald Leung, director
of
Lee Cheong Gold Dealers in Hong Kong.
"Asian people are still happy to buy gold. For the time
being, gold is neutral, trading on either side," said Leung,
adding that gold could be under pressure if China did raise
interest rates.
China sought on Monday to reassure people that inflation
will remain in check, voicing confidence that ample grain
supplies and excess capacity in industry will keep a lid on
price pressures.
Silver rose more than 1 percent on firm gold and
after holdings on the exchange-traded fund hit another record.
A rally in the Nikkei spurred buying in platinum
and palladium . Palladium and platinum often
track equity markets because of their industrial use.
The euro, Asian stocks and commodities got a fillip on
Monday after global financial authorities agreed to bail out
debt-swamped Ireland and protect Europe's wider financial
stability.
The size of Ireland's aid by the European Union and the
International Monetary Fund has yet to be negotiated, but is
likely to be smaller than Greece's 110 billion euros bailout
last May. One source said it could total 80 to 90 billion euros.
A strong euro helped offset worries about China's move to
tighten the economy. The People's Bank of China announced on
Friday it would increase required reserves by 50 basis
points, its fifth such announcement this year, in a fresh
attempt to keep a lid on inflation.
In the physical sector, premiums for gold bars in Singapore
were steady at 70 cents to the spot London prices. "It's a pretty slow start but we do see some buying around
from Indonesia and Thailand as well as physical offtake," said
a dealer in Singapore.
iShares Silver Trust , the world's largest
silver-backed exchange-traded fund, said its holdings rose to
another record of 10,814.62 tonnes by Nov. 19. For details of
the ETF's silver holdings, click on:
link.reuters.com/wux96h
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust , said its holdings rose to 1,289.336 tonnes
by Nov 19 from 1,286.299 tonnes on Nov 18. The holdings hit a
record at 1,320.436 tonnes on June 29.
Precious metals prices at 0617 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1361.30 7.15 +0.53 24.24
Spot Silver 27.67 0.46 +1.69 64.41
Spot Platinum 1668.50 5.50 +0.33 13.74
Spot Palladium 707.50 9.17 +1.31 74.48
Euro/Dollar 1.3749
Dollar/Yen 83.43
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