PRECIOUS-Gold crawls up as stimulus supports outlook

* Gold near 6-1/2-month high as QE remains supportive
* SPDR Gold Trust, iShares Silver Trust holdings hit highest
in a year
* Spot gold may rise to $1,800/oz - technicals
* Coming Up: U.S. CFTC commitment of traders, weekly; 1930
GMT

(Updates prices)
By Rujun Shen
SINGAPORE, Sept 21 (Reuters) - Gold firmed slightly on
Friday, reversing two straight sessions of losses, as investors
pinned hopes on recent central bank moves to further lift
sentiment in precious metals.
Gold has been hovering near a 6-1/2-month high of $1,777.51
an ounce, hit after the U.S. Federal Reserve announced a new
round of quantitative easing and pledged to keep rates low until
mid-2015, boosting appetite for gold, which benefits from a
low-interest rate environment.
"The long-term inflation outlook as a result of QE
(quantitative easing) is keeping gold sentiment buoyed," said a
Shanghai-based trader.
"We need to look at the inflation data from the United
States and Europe in the next few months to see if the easing
measures have any impact, and if gold prices can go much
higher."
Data on Thursday showed the U.S. manufacturing sector had
suffered its weakest quarter in three years, while the economies
of China and Europe slumped, triggering expectations for more
stimulus measures from central banks in these
economies.
Spot gold inched up 0.2 percent to $1,770.76 an ounce
by 0622 GMT, little changed from a week earlier.
U.S. gold edged up 0.2 percent as well, to
$1,773.50.
Technical analysis suggested spot gold could climb to $1,800
an ounce during the day, said Reuters market analyst Wang Tao.

INVESTMENT INTEREST ON THE RISE
Rekindled interest in precious metals has lifted holdings of
physically backed exchange-traded gold and silver funds to the
highest in about a year.
SPDR Gold Trust, the world's largest gold ETF, said
its holdings had hit 1,308.41 tonnes, the loftiest since last
August. Holdings in iShares Silver Trust,
the world's biggest silver ETF, climbed to a 11-month high of
9,940.66 tonnes by Sept 20.
The Relative Strength Index on spot gold stood at 76. A
reading above 70 suggests the underlying asset is overbought,
and the RSI on gold has been above 70 since at the end of
August.
But gold will remain attractive to investors seeking to
hedge against future inflation, or looking for alternative
investment in a low interest rate environment, traders said.
"We are not overbought, and there is still room for more
money to enter the gold market," said Yuichi Ikemizu, branch
manager for Standard Bank in Tokyo, adding that the net long
positions in U.S. gold futures and options were way below a peak
last year before gold struck a historical high above $1,920.
The net length in U.S. gold stood at 165,724 contracts by
Sept. 11, more than doubled from the level in mid-August but 35
percent lower than the peak of 253,653 contracts last August.

The U.S. Commodity Futures Trading Commission is due to
release this week's trader commitment data later in the day.
Spot platinum rose 0.9 percent to $1,634.74, but was
headed for a weekly loss of 4 percent -- its biggest one-week
decline in four months. The labour disputes in top platinum
producer South Africa's mining sector, however, are expected to
lend support to prices.

Precious metals prices 0622 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1770.76 3.57 +0.20 13.23
Spot Silver 34.72 0.13 +0.38 25.39
Spot Platinum 1634.74 13.74 +0.85 17.35
Spot Palladium 665.25 5.15 +0.78 1.95
COMEX GOLD DEC2 1773.50 3.30 +0.19 13.19 15446
COMEX SILVER DEC2 34.78 0.10 +0.28 24.59 5966
Euro/Dollar 1.2990
Dollar/Yen 78.14
COMEX gold and silver contracts show the most active months

(rujun.shen@thomsonreuters.com; +65-6870-3726; Reuters
Messaging: rujun.shen.thomsonreuters.com@reuters.net)