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PRECIOUS-Gold up for 2nd day, stimulus hopes support
July 25, 2012 / 4:13 AM / 5 years ago

PRECIOUS-Gold up for 2nd day, stimulus hopes support

 * Gold trapped in consolidation mode, awaiting c.bank
actions
 * Spot gold consolidates in $1,554.34-$1,599/oz - technicals
 * Coming up: Germany Ifo business climate, July; 0800 GMT

 (Updates prices)
 By Rujun Shen
 SINGAPORE, July 25 (Reuters) - Gold inched up on Wednesday,
extending gains into a second  session after poor economic data
from both sides of the Atlantic helped raise hopes for further
monetary stimulus measures, which would increase gold's appeal
as an inflation hedge.
 The latest figures showed that the U.S. and euro zone
economies were still struggling in July, and the Wall Street
Journal reported that the U.S. Federal Reserve was close to
taking new steps to boost U.S. economic growth. 
 Gold has been trading largely sideways for the past few
months as a lack of clarity on further monetary easing has kept
investors wary. Gold stands to benefit from a rising inflation
outlook resulting from easier monetary policy by central banks.
 "Intervention by central banks in the form of stimulus will
help gold break away from the range, but when it will take place
is a tricky question," said Nick Trevethan, senior metals
strategist at ANZ in Singapore.
 If the Fed remained silent on a further round of
quantitative easing, known as QE3, gold prices could still move
higher from late August as India's wedding season approaches, he
added.
 Investors are looking to the Fed's next policy meeting on
July 31 and Aug 1 for clues on the central bank's attitude
towards the bond purchasing programme. 
 
 "We are stuck in consolidation mode right now, with
$1,550-$1,560 being a floor for the time being. If we break the
key $1,530 level, it could trigger all sorts of nastiness," said
Trevethan.
 Spot gold inched up $1.23 to $1,581.07 an ounce by
0653 GMT, extending gains into a second straight session.
 The U.S. gold futures contract for August delivery 
gained 0.3 percent to $1,580.30.
 Technical analysis indicated spot gold may be trapped in the
range between $1,554.34 and $1,599 per ounce for the time being,
said Reuters market analyst Wang Tao. 
 
 "Cash is king these days," said Dick Poon, manager of
precious metals at Heraeus in Hong Kong. "People would rather
hold cash as they are not sure what will happen in the euro
zone."
 Physical dealers described a yawning market as buyers
patiently waited on the sidelines for bargain-hunting
opportunities.
 "Buying interest for physical gold is out there, but it is
very choosy and price-sensitive," said ANZ's Trevethan.
 
 Precious metals prices 0653 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1581.07    1.23   +0.08      1.10
  Spot Silver        26.85   -0.10   -0.37     -3.03
  Spot Platinum    1381.25    3.00   +0.22     -0.84
  Spot Palladium    559.25    2.97   +0.53    -14.29
  COMEX GOLD AUG2  1580.30    4.10   +0.26      0.86        18469
  COMEX SILVER SEP2  26.82    0.01   +0.03     -3.92         3295
  Euro/Dollar       1.2056
  Dollar/Yen         78.15
  COMEX gold and silver contracts show the most active months
  

 (Editing by Ed Lane)
 
 

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