* Silver hits two-month low; gold, silver RSI readings drop
* Gold to fall to $1,322 - technicals
* Coming up: U.S. consumer confidence, Jan; 1500 GMT
(Adds comments, details; updates prices)
By Rujun Shen
SINGAPORE, Jan 25 (Reuters) - Spot gold hit a ten-week low
on Tuesday, as support from safe-haven demand diminishes on
strong economic data out of Europe, but strong physical buying
and tight supply in Asia are expected to provide a floor for
prices.
Euro zone industrial new orders rose more than expected in
November, confirming the strength of recovery in industry in the
economic union.
The improved economic data, combined with speculation that
the European central bank might raise interest rates, pushed the
euro to a two-month high. The single currency held near the peak
on Tuesday.
"The gold market is a bit negative for the time being," said
Ronald Leung, a physical trader at Lee Cheong Gold Dealers,
adding that speculation on more tightening moves from China
before the Lunar New Year holiday also adds to the bearish
sentiment.
"But on the physical side, people are still buying. There
doesn't seem to enough supply in the physical market."
Spot gold fell below $1,330 for the first time in
about ten weeks, and was trading in a range of about $20. It
recovered to $1,332.45 an ounce by 0315 GMT, but remains on
course for a fourth consecutive day of decline.
The Relative Strength Index fell to 32.718, its lowest since
late October 2008.
U.S. gold futures fell nearly one percent to
$1,332.1.
A bearish target at $1,322 per ounce remains unchanged for
spot gold , based on its wave pattern and a triangle
pattern, said Wang Tao, a Reuters market analyst.
For a 24-hour gold technical outlook:
http://graphics.thomsonreuters.com/WT/20112501080712.jpg
"I don't see prices drop much further, as the strong
physical demand is supportive. But around the Chinese New Year,
market in Asia will be a bit quiet," said a Hong Kong-based
dealer.
The strong hold for gold prices would be around $1,320, he
added.
This year's Lunar New Year falls on Feb 3. China, a key
player in the region's gold market, kicks off a week-long
holiday on Feb 2.
Holdings in the SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, fell 10.926 tonnes, its
biggest one-day loss since early October, to 1,260.843 tonnes
by Jan 24.
Spot silver fell to $26.64 an ounce, its lowest in
nearly two months. It was trading at $26.77, down half a
percent. The RSI fell to 33.271, its lowest since early February
last year.
Holdings in the iShares Silver Trust gained 0.8 percent to
10,478.08 tonnes, off an 11-week low of 10,394.53 tonnes on Jan
21.
Spot platinum fell by 0.7 percent to $1,798.99, and
was the only precious metal with price rise so far this year.
Spot palladium shed 1.4 percent to $798.47, with a
nearly 10-year high of $825.50 within sight.
Precious metals prices 0315 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1332.45 -1.80 -0.13 -6.13
Spot Silver 26.77 -0.14 -0.52 -13.25
Spot Platinum 1798.99 -13.00 -0.72 1.78
Spot Palladium 798.47 -11.03 -1.36 -0.13
TOCOM Gold 3546.00 -67.00 -1.85 -4.91 50837
TOCOM Platinum 4828.00 -81.00 -1.65 2.81 11796
TOCOM Silver 71.10 -3.30 -4.44 -12.22 2051
TOCOM Palladium 2128.00 -75.00 -3.40 1.48 506
Euro/Dollar 1.3660
Dollar/Yen 82.44
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Ed Lane)
Reuters
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