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PRECIOUS-Gold steady ahead of Fed; gold-platinum premium narrows
September 13, 2012 / 4:26 AM / 5 years ago

PRECIOUS-Gold steady ahead of Fed; gold-platinum premium narrows

* Gold-platinum premiums narrowest since April
    * Spot gold may retrace to $1,708/oz - technicals
    * Coming up: US Fed Chairman Ben Bernanke news conference;
1815 GMT

 (Updates prices)
    By Rujun Shen
    SINGAPORE, Sept 13 (Reuters) - Gold was little changed on
Thursday with investors awaiting a key Federal Reserve policy
decision, a day after a German court ruling in favour of a euro
zone rescue fund sent bullion to its highest since the end of
February.
    The market is buzzing with hopes that the Fed will announce
another round of quantitative easing, known as QE3, at the
conclusion of a two-day policy meeting later in the day.
  
    Gold is set to get another boost if the expectations
materialise, as easier monetary policy stokes inflation outlook
and drives investors to bullion, seen as a good hedge against
rising prices.
    The price of bullion has risen more than 2 percent so far
this month, following a nearly 5-percent gain in August during
which central banks around the world appeared more willing to
take up further stimulus measures to aid a frail global economy.
    "If we do see a QE3 announcement, gold is likely to race
through $1,800 an ounce," said Chen Min, an analyst at Jinrui
Futures in the southern Chinese city of Shenzhen.
    "But we also need to realise that the marginal effect of
quantitative easing will diminish and it will be too optimistic
to expect gold to break above $1,850 even if QE3 is announced."
    During Asian trading hours, gold may just mark time and
continue to move in a tight range, with many investors standing
by on the sidelines. 
    Spot gold was little changed at $1,731.59 an ounce by
0555 GMT, off a six-month high of $1,746.20 hit on Wednesday
after a German constitutional court handed down a ruling in
favour of the euro zone's rescue fund. 
    U.S. gold also traded nearly flat at $1,734.30.
    Technical analysis showed a less optimistic picture. Spot
gold may retrace to $1,708 an ounce during the day, said Reuters
market analyst Wang Tao. 
  
    Though the prospect of QE3 has greatly encouraged risk
appetite among investors, sending Wall Street to pre-crisis
levels and sinking the dollar to a four-month low against a
basket of currencies, some analysts were sceptical of what
effect another round of bond-buying would have on the economy.
    "Although previous rounds of QE have helped kick-start some
growth in the U.S., the fact that we are once again at the
'money trough' is not very reassuring," Ed Meir, an analyst at
INTL FCStone, said in a research note.
    "We will have to see if investors reach the same conclusion
in the weeks ahead, particularly if they see no immediate
improvement in the macro numbers."
    Holdings of gold-backed exchange-traded funds eased slightly
from a historical high to 72.47 million ounces by Sept. 12,
still up nearly 3 percent over the past month, as investor
interest in gold picked up again on prospects of easing monetary
policy around the world. 
    Labour unrest in South Africa's gold and platinum industries
are still affecting prices. Machete-wielding strikers forced the
world's No.1 platinum producer Anglo American Platinum to shut
down some of its South African operations, sending spot platinum
 to a five-month high of $1,654.49 in the previous
session. 
    Spot platinum traded up 0.8 percent to $1,648.49. Gold's
premium over platinum fell to just above $80 an ounce, a level
unseen since April.
    Spot palladium gained 0.9 percent to $677.20, after
hitting $680.50 earlier in the session -- a four-month high
first reached on Wednesday.
    
   Precious metals prices 0555 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1731.59    0.59   +0.03     10.73
  Spot Silver        33.25   -0.02   -0.06     20.08
  Spot Platinum    1648.49   12.29   +0.75     18.34
  Spot Palladium    677.20    6.20   +0.92      3.79
  COMEX GOLD DEC2  1734.30    0.60   +0.03     10.69        10410
  COMEX SILVER DEC2  33.29   -0.01   -0.02     19.24         3757
  Euro/Dollar       1.2926
  Dollar/Yen         77.69
  COMEX gold and silver contracts show the most active months
 
 (Editing by Himani Sarkar)
 (rujun.shen@thomsonreuters.com; +65-6870-3726; Reuters
Messaging: rujun.shen.thomsonreuters.com@reuters.net)

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