* Light physical buying seen in Asia
* Gold strength to continue into next year
* Gold seeks direction - technicals []
* Coming up: U.S. initial jobless claims; 1330 GMT
(Adds details; updates prices)
By Rujun Shen
SINGAPORE, Dec 16 (Reuters) - Spot gold was little changed
on Thursday as physical buying lent support amid a steady
dollar after upbeat U.S. data, while investors looked towards
a European Union summit that is expected to find solutions for
the region's sovereign debt crisis for trading cues.
U.S. industrial production rose at its fastest pace in
four months in November, implying a self-sustaining recovery
is now entrenched, but a mild gain in consumer prices
indicated still abundant slack in the economy. []
Spot gold was nearly flat at $1,380.70 an ounce by
0315 GMT, after declining in the previous session on the
dollar rally following Moody's move to put Spain on review for
a possible downgrade.
U.S. gold futures edged down 0.3 percent to
$1,381.5.
"So long as the U.S. doesn't raise interest rates, gold
will remain strong, and people are looking at $1,500 or even
$1,600 price levels for next year," said a Hong Kong-based
dealer.
"China has been tightening, but it would be reluctant to
raise interest rates rapidly, fearing the inflow of hot money."
Gold was expected to trade in the range of $1,370 to
$1,420 in the last few weeks of the year, he added.
The technical signals for spot gold are conflicting as
chances are even for a rise as well as a fall from the current
level, according to Reuters market analyst Wang Tao.
For a 24-hour gold technical outlook:
http://graphics.thomsonreuters.com/WT/20101612090534.jpg
Light physical buying was seen in Asia, but scrap selling
has subsided since prices eased from record high levels hit
last week, dealers said.
Investors are watching the European Union leaders start a
two-day summit on Thursday, hoping to find a solution to the
region's sovereign debt crisis. []
The euro, which came under pressure on Wednesday, remained
weak and could decline further, as the EU summit was seen
unlikely to come up with a cure. The dollar was steady against
a basket of currencies.
With the euro zone's debt crisis lingering and the outlook
for U.S. economy still lukewarm, gold prices are seen to be
well-supported into the first quarter. But the momentum, which
has pushed prices up 26 percent so far this year, could ease
after that.
"After averaging around the $1,375 per ounce level in the
March quarter 2011, we expect the gold price to gradually ease
as the global recovery looks better entrenched and investor
jitters abate," said a research report by National Australia
Bank.
"Even so, the gold price should hold up quite well next
year with some ongoing investment demand and a further
recovery in jewellery consumption being supportive factors."
Holdings in the SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, edged down less than one
tonne to 1,286.187 tonnes, its lowest since late November.
Precious metals prices at 0315 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1380.70 0.25 +0.02 26.01
Spot Silver 28.95 0.16 +0.56 72.01
Spot Platinum 1691.99 -3.51 -0.21 15.34
Spot Palladium 747.22 0.50 +0.07 84.27
TOCOM Gold 3745.00 -8.00 -0.21 14.91 31921
TOCOM Platinum 4633.00 5.00 +0.11 5.75 6119
TOCOM Silver 78.70 -0.30 -0.38 52.22 1761
TOCOM Palladium 2032.00 -10.00 -0.49 74.42 272
Euro/Dollar 1.3221
Dollar/Yen 84.15
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Himani Sarkar)
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