* Hopes for Greek debt deal, German data lifts euro, stocks
* Prices set to face resistance near $1,740/oz
* Silver outperforms gold, set for 3.5 pct weekly rise
By Jan Harvey
LONDON, Nov 23 Gold prices rose above $1,730 an
ounce on Friday as positive German economic data and hopes that
Greece's creditors are nearing an agreement to tackle its debt
lifted the euro to a three-week high versus the dollar and
trimmed losses in stocks.
Trade was expected to be quiet, however, with the U.S. stock
market open for only a half-day of business after the
Thanksgiving holiday on Thursday.
Spot gold was up 0.3 percent at $1,733.34 an ounce at
1223 GMT, while U.S. gold futures for December delivery
were up $5.60 an ounce at $1,733.80.
The metal has risen more than 1 percent this week, lifted by
gains in the euro, which is set for its biggest weekly rise in
seven, and worries over the U.S. 'fiscal cliff', a $600 billion
package of tax and spending changes set to kick in next year.
"Investors are looking to buy into the dips because there is
obviously still event risk around the fiscal cliff, and we're
not sure whether China's really rebounding or not," Societe
Generale analyst Robin Bhar said.
"Those are two big uncertainties that I think will make the
market want to at least support the dips," he added. "We could
finish the year around $1,740, $1,750. Between now and then, I'd
expect to stay rangebound."
In the near term gold was set to take direction from the
wider markets. It tends to benefit from dollar weakness, which
makes assets priced in the U.S. unit cheaper for other currency
holders, and firmer appetite for assets seen as higher risk,
such as stocks and commodities.
The euro hit a three-week high against the dollar and
European stocks firmed on Friday after German IFO numbers showed
a surprise improvement in business sentiment, and as hopes grew
that Greece would reach an agreement on its debt.
The International Monetary Fund has relaxed its debt-cutting
target for Greece and only a 10 billion euros ($13 billion) gap
remains to be filled for a vital aid tranche to be paid,
Greece's finance minister said on Friday.
Finland's finance minister said she expected a deal to be
done on Greek debt on Monday.
Gold prices are set to face resistance around $1,740 an
ounce, technical analysts said.
"Gold is just a few dollars shy of its 50-day moving average
sitting at $1,741, and more importantly, a key technical level
lurking at $1,739.10," UBS said in a note.
"Our technical strategist notes that a break above this
level, which is the month's high, would be a crucial bullish
development that would open up $1,748.95, the 62 percent
retracement of the October/November sell-off ahead of $1,794.80,
the October high."
Dealers said on Friday that business was slow in Asia's
physical gold market as rangebound prices dampened interest from
both potential buyers and scrap sellers, defying expectations of
a pick-up in demand during the holiday season.
Analysts and traders had expected demand to strengthen
during the holiday season in the last quarter of the year, with
top consumers India and China, which between them account for
nearly half of global gold demand, leading the way.
"China's demand isn't on a downtrend, but it's not picking
up either," a Hong Kong-based dealer said.
Harmony Gold, South Africa's third-largest bullion
producer, said on Friday operations at its Kusasalethu mine had
not been affected by violence between rival labour unions that
left two miners dead.
Silver was up 0.3 percent at $33.39 an ounce. It has
outperformed gold to rise 3.5 percent this week, pushing the
gold/silver ratio, which measures the number of silver ounces
needed to buy an ounce of gold, to a six-week low at 51.9.
Spot platinum was flat at $1,579.75 an ounce, while
spot palladium was down 0.1 percent at $653.75 an ounce.
(Reporting by Jan Harvey; editing by William Hardy)