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PRECIOUS-Gold rises 1.5 pct on stimulus hopes for US, Europe
July 25, 2012 / 8:04 PM / 5 years ago

PRECIOUS-Gold rises 1.5 pct on stimulus hopes for US, Europe

 * Hopes for U.S., European monetary easing boost gold
 * Heavy trading of COMEX, SPDR Gold options support
 * Gold's premium over platinum highest since January
 * Coming up: U.S. durable goods Thursday

 (Adds details, updates market activity,)
 By Frank Tang
 NEW YORK, July 25 (Reuters) - Gold rose 1.5 percent on
Wednesday, outperforming equities for the third day in a row as
renewed talk of U.S. and European monetary stimulus boosted the
precious metal's appeal to investors seeking an inflation hedge.
 Bullion notched its biggest daily rise in around a month on
speculation the European Central Bank will create new money to
fund rescue operations for troubled euro zone countries, traders
 Late on Tuesday, gold got a boost from talk that the Federal
Reserve was exploring new tools to boost U.S. growth.
 "The gold market has been looking for any hints of any
quantitative easing program. You are seeing this big bounce
today off the fact that there could be something going on in
euroland," said Jeffrey Sherman, commodities portfolio manager
at DoubleLine Capital LP, which has $38 billion in assets.
 Options-related buying above the popular $1,600 call strike
price also lifted underlying futures ahead of Thursday's COMEX
August option expiry. In addition, technical support helped as
the metal now appears moving closer to break out of a trading
range following Wednesday's rally, dealers said.
 Spot gold was up 1.5 percent at $1,604.01 an ounce by
3:35 p.m. EDT (19 35 GMT), having hit a near three-week high at
$1,609.91 earlier in the session.
 Traders cited technical buying as Wednesday's rally lifted
bullion above its chart resistance of 20- and 50-day moving
averages. Also, active trading of the options on COMEX and the
SPDR Gold Trust also supported prices. 
 U.S. gold futures for August delivery settled up
$31.90 an ounce at $1,608.10, with trading volume at 60 percent
above its 30-day average to be the strongest in almost 2 months,
preliminary Reuters data showed.
 Gold has held in a $75 range in July, its narrowest monthly
spread since April. Weak seasonal buying in top bullion
consumers such as India and China, waning inflows into
gold-backed exchange-traded funds and euro zone debt jitters
have limited price gains.
 U.S. equities fell for a fourth day, with the S&P 500 stock
index reversing early gains after new U.S. single-family
home sales dropped by the most in more than a year. 
 Silver rose 1.4 percent to $27.32 an ounce.
Confidence in the metal remains shaky, however, analysts said,
with investors wary of taking profits in the traditionally
volatile asset.
 The world's No. 1 silver-backed exchange-traded fund, the
iShares Silver Trust, posted an outflow 0.7 percent on
 Gold's rise also pushed its premium over platinum above $200
an ounce for the first time since January.
 Platinum group metals, which are largely used as catalytic
converters by the auto industry, underperformed gold. Spot
platinum rose 1.1 percent to $1,393.45 an ounce, while
spot palladium gained 0.8 percent to $560.65 an ounce.
 3:35 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
             SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1608.10  31.90   2.0  1577.90 1610.00  187,196
 US Silver SEP  27.466  0.655   2.4   26.780  27.520   39,684
 US Plat OCT   1399.40  12.80   0.9  1383.30 1407.00    7,642
 US Pall SEP    565.25   3.65   0.6   561.00  569.00    2,581
 Gold          1604.01  24.17   1.5  1579.35 1609.91         
 Silver         27.320  0.370   1.4   26.860  27.550
 Platinum      1393.45  15.20   1.1  1386.00 1402.49
 Palladium      560.65   4.37   0.8   563.45  566.75
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
             CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        246,445   153,589   191,721     18.98    0.21
 US Silver       42,615    52,755    58,222     30.74   -4.07
 US Platinum      7,760    10,557     9,169        23    0.00
 US Palladium     2,684     3,109     4,539                  
 (Additional reporting by Jan Harvey in London; Editing by Dale
Hudson and David Gregorio)

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