* North Korea artillery hits S. Korea island
* Gold may rebound to $1,380 - technicals []
* Coming up: U.S. FOMC Nov 2-3 meeting minutes; 1900 GMT
(Adds comment, details; updates prices)
By Rujun Shen
SINGAPORE, Nov 23 (Reuters) - Gold trimmed early losses on
Tuesday after a major exchange of artillery fire on the Korean
peninsula boosted appetite of the safe-haven asset, as well as
the dollar.
North Korea on Tuesday fired dozens of artillery shells at
a
South Korean island, setting buildings on fire and prompting a
return of fire by the South, Seoul's military and media reports
said. []
"It tends to add to the already quite risk-averse
environment, surrounding European issues and Ireland," said
Daniel Major, an analyst at RBS. It also comes along with
"weak month-on-month commodity imports by China with potential
implications of policy tightening, and sales of state
stockpiles to curb inflation."
Spot gold moved back to positive territory
briefly after falling as much as 0.6 percent to $1,357.7
earlier in the day. It was trading at $1,364.15 an ounce at
0742 GMT, down 0.1 percent.
U.S. gold futures gained 0.2 percent to $1,361 an
ounce.
The dollar and U.S. Treasuries rose and U.S. stock futures
fell on Tuesday.
"This is a trigger for the 'risk off' button. You'll
certainly see selling in risk-based markets like equities and
commodities until we get a better read on events," Mark Pervan,
senior commodities analyst at ANZ in Melbourne.
"There should be reasonable support for gold although we
often see a firmer dollar as the initial reaction to risk and
lower gold prices, but industrial metals might get hit, oil,
too."
Ireland begins two nervous weeks of political maneuvering
on
Tuesday as the government dares the opposition to block an
austerity budget on which a multi-billion euro EU/IMF bailout
Is
riding. []
"Gold is likely to be rangebound in the near future, with
$1,340 being a good support level. The outlook is still firm,
as
the European debt situation is not very optimistic," said a
Singapore-based dealer.
Physical selling at round $1,365 was spotted in early Asian
trade, but overall trade was scarce, especially as Japan was
closed for a public holiday, the dealer added.
Spot gold is expected to rally towards $1,380 per ounce as
it completed a consolidation between $1,342 and $1,363, and is
poised to rise further, according to Reuters market analyst
Wang
Tao.
For a graphic of the 24-hour gold technical outlook, see:
http://graphics.thomsonreuters.com/WT/20102311091728.jpg
Gold is well supported by the uncertainties in Ireland's
fiscal stability, traders and analysts said.
"Precious metals have good support, as the situation in
Europe is still unstable despite the rescue package," said a
trader based in Hong Kong. "It has attracted funds in
safe-haven
buying."
"Liquidity is going to dry out later this week due to the
Thanksgiving holiday in the U.S. But the thin liquidity might
exaggerate price moves."
With the U.S. Thanksgiving holiday around the corner,
investors are watching for a batch of data, as well as minutes
from the Federal Reserve's meeting on Nov 2-3, where the Fed
decided to launch its $600 billion bond purchase programme.
Spot silver lost nearly one percent to $27.56 an
ounce.
Holdings in the iShares Silver Trust , the world's
largest physically-backed exchange-traded fund, hit a record
high of 10,841.98 tonnes by Nov 22. []
Precious metals prices at 0742 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1364.15 -1.94 -0.14 24.50
Spot Silver 27.56 -0.26 -0.93 63.76
Spot Platinum 1651.99 -8.01 -0.48 12.61
Spot Palladium 682.72 -8.25 -1.19 68.36
(Editing by Manash Goswami)
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