* Gold hits highest in nearly 3 weeks on technical buying
* Metals, crude oil off initial lows from China rate hike
* Platinum, palladium rally to multi-year highs
* Coming up: U.S. jobless claims due Thursday
(Recasts, adds comments, link to graphic, updates to market
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By Frank Tang
NEW YORK, Feb 8 (Reuters) - Gold rose 1 percent on Tuesday
to its highest in nearly three weeks on inflation fears and a
technical breakout after breaching key resistance at a 100-day
moving average.
A rise in Chinese interest rates for the second time in
just over six weeks benefited gold's status as an inflation
hedge, even as the move initially prompted selling in the metal
along with industrial commodities. []
Gold was trying to restore upward momentum after gaining
more than 4 percent in the past 10 days, withstanding fading
safe-haven demand as U.S. equities rallied to mid-2008 highs
and U.S. Treasury bond yields rose for a seventh straight
session on inflation worries. [] []
Gold prices spiked after rising above the 100-day average
in New York's morning session, triggering technical buy-stops
and short-covering, traders said. (Graphic:
http://link.reuters.com/ruq87r )
"Gold has continued its uptrend since it has broken above
its down trendline from the January high, and it has gotten
through the 20-day moving average which was held for several
days," said Rick Bensignor, chief market analyst at investment
bank Dahlman Rose.
Spot gold <XAU=> rose 0.9 percent to $1,362.90 an ounce by
2:58 p.m. EST (1958 GMT).
U.S. gold futures for April delivery <GCJ1> settled up
$15.90, or 1.2 percent, an ounce at $1,364.10. Trading volume
was about 40 percent below its 30-day average, in line with
weaker turnover in the last several sessions.
Afshin Nabavi, head of trading at Geneva's MKS Finance,
cited short-covering and technical buying, which lifted April
gold futures above last Friday's highs.
"Specs went short off the China headlines earlier. This is
all futures-driven, as stops are driven through the post
non-farm payrolls spike of $1,361, followed by the 100-day
moving average around $1,362," Nabavi said.
Simon Weeks, head of precious metals at the Bank of Nova
Scotia, said consumer demand from China, the world's
second-biggest bullion consumer, could rise after the end of
the Lunar New Year holidays this week.
COMMODITIES RECOVER
Oil and copper prices recovered losses made after China's
rate hike. The dollar fell sharply against the euro, adding
further upward pressure to gold. [] []
Also supporting sentiment towards gold, investment in
exchange-traded funds showed signs of stabilization, with
holdings in the SPDR Gold Trust <GLD> up 1 tonne in the past
week at 1,228.864 tonnes. []
In January, the fund registered its largest monthly outflow
of metal since April 2008 as investors favored equities and
industrial commodities over perceived safe havens.
"The SPDR holdings have been nearly unchanged, and
profit-taking from investors has perhaps stopped for the
moment," said LBBW commodities strategist Thorsten Proettel.
Gold prices withstood intense pressure last week, posting
their first weekly rise this year, despite signs of an
improving global economy and that the euro zone debt crisis had
not worsened.
Silver <XAG=> rallied 3.2 percent on Tuesday to $30.30 an
ounce.
Silver has gained 8 percent this month to within a dollar
of a 31-year peak of $31.22 an ounce seen in early January. It
is so high the Austrian Mint said it had canceled production of
five- and ten-euro silver coins indefinitely. []
Among other precious metals, platinum and palladium hit
multi-year highs. Both have seen inflows into some of the major
ETFs in the past week, such as ETF Securities' U.S.-listed
products, indicating investor appetite.
Spot platinum <XPT=> hit its highest since July 2008 at
$1,860.24 an ounce, and was last up 0.9 percent at $1,855.
Palladium <XPD=> rose to a 10-year high at $836.50 and was last
up 2 percent at $831.97 an ounce.
Prices at 3:27 p.m. EST (2027 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1364.10 15.90 1.2% -4.0%
US silver <SIH1> 30.271 0.928 0.0% -2.2%
US platinum <PLJ1> 1861.90 17.70 1.0% 4.7%
US palladium <PAH1> 838.45 19.40 2.4% 4.4%
Gold <XAU=> 1363.60 13.14 1.0% -3.9%
Silver <XAG=> 30.29 0.92 3.1% -1.8%
Platinum <XPT=> 1854.99 16.99 0.9% 4.9%
Palladium <XPD=> 831.97 16.50 2.0% 4.1%
Gold Fix <XAUFIX=> 1363.50 9.50 0.7% -3.3%
Silver Fix <XAGFIX=> 29.42 21.00 0.7% -4.0%
Platinum Fix <XPTFIX=> 1848.00 5.00 0.3% 6.8%
Palladium Fix <XPDFIX=> 823.00 5.00 0.6% 4.0%
(Additional reporting by Amanda Cooper and Jan Harvey in
London; Editing by Dale Hudson)
