PRECIOUS-Gold hits 2-week high on Obama victory

Wed Nov 7, 2012 8:00am GMT

* Obama seen continuing with economic stimulus
    * That boosts appeal of gold as hedge against inflation
    * Analysts say bullion to rise towards $1,800 per ounce
    * But technicals suggest could retrace to $1,700 in short
term 
    * Coming Up: U.S. Consumer credit; 2000 GMT

 (Updates prices, adds details)
    By Lewa Pardomuan
    SINGAPORE, Nov 7 (Reuters) - Gold extended gains on
Wednesday to hit its highest level in two weeks after President
Barack Obama was re-elected in the United States, paving the way
for continued monetary stimulus in the world's largest economy.
    The precious metal, typically seen as a hedge against
inflation, in October rallied to an 11-month high above $1,795
an ounce after the U.S. Federal Reserve announced a third round
of aggressive economic stimulus in September.
    Obama's victory helps gold as it means quantitative easing
is set to continue, said Yuichi Ikemizu, branch manager for
Standard Bank in Tokyo.
    "I think gold will be going back to $1,800 this year. We are
going to see higher gold (prices) in the coming days, weeks and
months," he added. 
    Gold reversed early losses to hit around $1,729 an
ounce, its strongest since Oct 23. It stood at $1,729.18 by 0738
GMT, up $13.84, but was still well below a lifetime high around
$1,920 struck in September last year.
     U.S. gold for December rose $14.00 to $1,729.00 an
ounce.    
    
    
    CLEAR VICTORY  
    Obama rolled to a second term in the White House with a
clear victory over Republican challenger Mitt Romney as the
Democrat overcame deep doubts about his handling of the U.S.
economy. 
    "We forecast gold will end the year at $1,780 an ounce and
peak late in 2013 at around $1,890 an ounce," ANZ said in a
report. 
    "We think there could be upside risks to these forecast
highs, in the event of additional U.S. policy easing or signs of
inflation following the liquidity injections of the past four
years."
    A physical dealer in Singapore said investors had taken the
opportunity to buy back after the market dropped on Friday.
    "I think India has bought enough, unless there's a sudden
last-minute rush," he added.
    The festive season in main gold consumer India peaks in
November with Diwali, the Hindu festival of lights. Weddings
also take place at this time, with gold jewellery forming a key
part of the dowry daughters receive from their parents
    But gold imports to India could fall to 550 tonnes next
year, after touching 967 tonnes in 2011, as high inflation and
prices bite into disposable incomes of consumers, the head of a
trade body said on Tuesday. 
       
 Precious metals prices 0738 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1729.18   13.84   +0.81     10.58
  Spot Silver        32.35    0.40   +1.25     16.83
  Spot Platinum    1563.24   13.25   +0.85     12.22
  Spot Palladium    622.00    8.40   +1.37     -4.67
  COMEX GOLD DEC2  1729.00   14.00   +0.82     10.35        53093
  COMEX SILVER DEC2  32.35    0.32   +0.99     15.89        11825
  Euro/Dollar       1.2874
  Dollar/Yen         80.28
 
  COMEX gold and silver contracts show the most active months
 
    
    

 (Additional reporting by Rujun Shen; Editing by Joseph Radford)