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PRECIOUS-Gold ticks up near 1-month top on economic concerns

Published 06/07/2011, 02:33 AM
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* Gold faces resistance at $1,553-technicals [ID:nL3E7H704B]

* Coming Up: U.S. ICSC chain stores yy Weekly; 1145 GMT (Updates prices, activity in physical market)

By Lewa Pardomuan

SINGAPORE, June 7 (Reuters) - Gold inched up on Tuesday, after rising to its strongest in more than a month in the previous session, as fears about a slowing U.S. economy prompted purchases from investors seeking an alternative investment.

Gold added $2.45 at $1,545.50 an ounce by 0600 GMT after rising to as high as $1,553.30 on Monday, with investors awaiting a speech by Federal Reserve Chairman Ben Bernanke on the U.S. economic outlook later in the day.[ID:nN06262310]

Gold is still well below a lifetime high around $1,575 touched in early May, but with the U.S. dollar under pressure, equities markets falling and the debt crisis in Europe far from over, bullion -- with its safe-haven status -- continues to be one of the chief beneficiaries.

"I think the odds are stacked in favour of gold at the moment," said Darren Heathcote, head of trading at Investec Australia in Sydney.

"I guess the other thing to watch is what happens if we're getting more rhetoric from the various ministers and powers within Europe about the Greece situation etcetera. I think the market is still extremely weary of what the potential outcome may be."

Greek Prime Minister George Papandreou told his cabinet on Monday it was crucial to accept years of austerity to secure a new international bailout, a challenge for a nation already seething over corruption. [ID:nLDE7550KZ]

Silver , which normally tracks gold, was flat at $36.73 an ounce, below a record at $49.51 an ounce hit in April.

Gold prices, which have gained for the last three straight weeks, have been supported by the recent soft patch of data from the United States.

Federal Reserve officials said recent economic data has been disappointing, with one suggesting it could delay the Fed's exit from its extremely easy monetary policy. [ID:nN06299146]

The Fed has kept interest rates near zero for two-and-half years and this month completes a $600 billion round of Treasury securities purchases designed to boost an economy still recovering from its worst recession since the 1930s.

The euro held firm near a one-month high on Tuesday, while most Asian stocks eased as a trail of weak U.S. economic data pointed to slowing growth.

Americans' disapproval of how President Barack Obama is handling the U.S. economy and its growing budget deficit has reached new highs amid broad frustration over the slow pace of economic recovery, according to a Washington Post-ABC New poll released on Tuesday. [ID:nN07303542]

The physical market saw purchases from jewellers in parts of Asia, but volume was low as bullion prices held near Monday's high.

"I guess it is still quiet, with light buying by India and Thailand. My premiums remain at $0.60 to $0.80," said a physical dealer in Singapore, referring to premiums for gold bars to spot London prices.

India's gold futures rose on Monday chasing gains in the overseas markets, while demand in domestic spot market improved despite price rise as jewellers made significant purchases.

Holdings of the largest silver-backed exchange-traded-fund (ETF), New York's iShares Silver Trust and the largest gold-backed ETF New York's SPDR Gold Trust remained unchanged from Friday to Monday.

Precious metals prices 0600 GMT Metal Last Change Pct chg YTD pct chg Turnover Spot Gold 1545.50 2.45 +0.16 8.88 Spot Silver 36.73 0.00 +0.00 19.02 Spot Platinum 1808.99 3.69 +0.20 2.35 Spot Palladium 785.22 1.22 +0.16 -1.79 TOCOM Gold 4000.00 -4.00 -0.10 7.27 33863 TOCOM Platinum 4721.00 -41.00 -0.86 0.53 11123 TOCOM Silver 94.80 -0.30 -0.32 17.04 1009 TOCOM Palladium 2035.00 -15.00 -0.73 -2.96 210 Euro/Dollar 1.4612 Dollar/Yen 80.30 TOCOM prices in yen per gram. Spot prices in $ per ounce. (Editing by Himani Sarkar)

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