Nov. 11, 2010, 9:12 a.m. EST

Gold gain on Chinese inflation data

Silver and palladium futures score bigger percentage increases

LONDON, Nov 11 (Reuters) - Gold edged up on Thursday on
physical demand and a pause in this week's dollar rally, with
investors closely watching for currency signals from the Group 

PRICES
  * Spot gold XAU= was bid at $1,407.25 at 0733 GMT from
$1,402.70 late in New York on Wednesday.

FUNDAMENTALS

 * The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust (GLD.P) said its holdings fell to 1,291.766 tonnes by
Nov 10 from 1,292.981 tonnes on Nov 9. [GOL/SPDR]

 * Anglogold Ashanti Limited (ANGJ.J) said it was very
positive on the gold price, planning for $1,300-1,400/oz over
next 12 months. [ID:nWEA8805]

 * China Gold International Resources Corp Ltd plans to raise
up to 311.2 million in an initial public offering in Hong Kong
later in November, according to a term sheet seen by Reuters on
Thursday.

 * Crew Gold Corp (CRU.TO), owned by Russia's largest
steelmaker Severstal (CHMF.MM), said Piscedda Mining Corp was
claiming $127 million in damages related to a Crew Gold unit
taking over mining operations from PMC at its flagship LEFA
project in Guinea in 2008.


TECHNICALS
 * Gold support at $1,389 an ounce, resistance at $1,424 and
14-day RSI at 68.3.
 * Silver support at $26.90 an ounce, resistance at $28.57
14-day RSI at 74.8.

//

 

 

 * Dollar rally pauses, supports gold [USD]

 * Gold rangebound $1,382-$1,410- technicals 

 By Rujun Shen

 SINGAPORE, Nov 11 (Reuters) - Gold prices edged up on
physical demand and a pause in a dollar rally as investors
closely watched for currency signals from the Group of 20
leadership summit that began on Thursday in Seoul.

 Spot gold XAU= gained 0.3 percent to $1,407.35 an ounce
by 0349 GMT, off the all-time high of $1,424.10 hit on Tuesday.

 A deeply divided G20 struggled to move beyond broad
promises of economic cooperation and into thorny issues of
exchange rates and trade balances as world leaders gathered in
Seoul for a two-day summit.

 "People are looking closely at the dollar. Trade may get a
bit choppy today because of uncertainties in the G20 meeting,"
said a Hong Kong-based dealer.

 "Everyone is looking to buy physical gold, instead of
holding currency. The second round of quantitative easing in
the U.S. just got more people interested in gold."

 The dollar paused after four straight days of gains, during
which gold shook off the dollar influence and scored a new 

sovereign debt woes.

 "Another reason behind gold's strength is the active buying
in the physical market in Asia. Scrap supply has increased a
bit, but not enough to satisfy the demand for physical gold,"
said Dick Poon, manager at Heraeus in Hong Kong.

 Spot silver XAG= rose 1.3 percent to $27.54 an ounce.
U.S. silver futures SIZ0 gained 2.6 percent to $27.56 after
sharp falls in the previous session.

 The gold-silver ratio, used to measure how many ounces of
silver are needed to purchase one ounce of gold, stood at
51.11, just above 50.92 hit on Tuesday, its lowest since
mid-2008 and well under a 28-year average at 64.79.

 "We continue to expect the silver market to be in
surplus
 this year and in 2011, with investment demand proving to be
pivotal for prices," said Barclays in a research note.

 Holdings in iShares Silver Trust (SLV), the world's largest
silver-backed exchange-traded fund, jumped more than three
percent to 10,718.82 tonnes by Nov 10.

 Worries about inflation also lure investors to precious
metals.

 In China, the world's largest gold producer, October's
headline consumer inflation hit a 25-month high of 4.4 percent
in October, official data showed, above expectations of 4.0
percent. [ID:nTOE6A707N]

 To combat inflation and reign in excessive liquidity,
China's central bank is likely to tighten monetary policy
further, said head of Industrial and Commercial Bank of China,
the world's biggest lender, after some Chinese banks were asked 
on Wednesday to raise reserve requirements. 

non-U.S. investors but this negative correlation retreated to
its weakest in two months, suggesting investor discomfort lies
with the single European currency and its member nations.

 Spot gold rose 0.7 percent to $1,402.20 an ounce by 1433
GMT, some 1.7 percent off Tuesday's all-time peak of $1,424.10.

 In its most volatile day of trade since May, gold dropped
more than $30 from this peak in the previous session, triggered
by a sharp sell-off in U.S. silver futures caused by a 30
percent increase in margins. [ID:nN0999567]

 "In the past few days, what we've seen is the dollar and
gold moving in the same direction and the last time that
happened was leading up to the erosion in confidence in some
peripheral EU countries and this has occurred again," said HSBC
analyst Jim Steel.

 "The markets are still on the defensive, they haven't been
rescued yet by the EU issue, but it has probably helped put the
brakes on the decline," he said.

rolling one-month basis, retreated to minus 0.48, from minus
0.61 the day before, indicating gold's tendency to move in the
opposite direction to the dollar has lessened. A positive
correlation suggests the two assets move in lock-step.

 In the second quarter of the year, when the euro zone debt
crisis unfolded, gold and the greenback often moved in tandem as 

Nov. 10, 2010, 8:48 a.m. EST

Crude oil up, gold futures down after U.S. data

Nov. 9, 2010, 9:54 a.m. EST

Gold on its way to fourth straight record

SAN FRANCISCO (MarketWatch) — Gold futures rallied more than 1% Tuesday, poised to settle at their fourth consecutive record high, as the dollar fell and concerns about European debt attracted more investors to precious metals.

Gold for December delivery (GCZ10 1,421, +17.80, +1.27%) added $14.30 to $1,417.70 an ounce on the Comex division of the New York Mercantile Exchange. Silver notched a fresh 30-year high and copper topped $4 a pound, at its highest in more than two years.

Gold denominated in euros has traded at its highest since the end of June and 3% shy of its record high, analysts at Commerzbank said in a note to clients Tuesday.

 “Concerns about the risk of insolvency of euro peripheral countries are back in the focus of market players,” they said.

The dollar index(DXY 76.81, -0.21, -0.28%) , which compares the U.S. unit to a basket of six currencies, was down 0.2% to 76.90, from 76.98 late Monday. Gold has surged to records since late August on expectations the Federal Reserve’s monetary stimulus will depress the dollar, making gold more valuable as an alternative store of wealth. Read more on currencies.

Futures prices settled at a record of $1,403.20 on Monday. See Monday’s metals story.

 “The golden surge is rolling right along as investors flock to hard assets at a dizzying pace,” said Kevin Kerr, editor of Kerr Commodities Watch. “Gold [at] $1,500 and beyond is not only likely, it is almost certain.”

But Kerr expects prices to experience a correction before they reach $1,500, so he also suggests “caution and agility” for traders.

“We see even more potential in silver and the rare earths, as they are precious but also industrial metals,” he said.

Prices for rare earths climbed after speculation emerged in late September that China had halted or restricted shipments of the resources to Japan.

December silver (SIZ10 2,867, +123.80, +4.51%) kept its rally going, surging 93 cents, or 3.4%, to $28.38 an ounce. That’s a fresh 30-year high for the metal.

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