Friday, September 14, 2012

PRECIOUS-Gold extends rally to hit six-month high after Fed

* Bullion set for four-week rally, first time since January
    * Gold could see resistance at major highs $1,790-1,802
    * S.African mining labor strife adds support to platinum

 (New details throughout, updates comment, changes byline,
dateline, previously LONDON)
    By Frank Tang
    NEW YORK, Sept 14 (Reuters) - Gold rose to a six-month high
on Friday, extending the previous session's 2 percent rally
after the U.S. Federal Reserve unleashed another round of
aggressive stimulus. 
    Platinum group metals gained sharply on supply worries due
to mining unrest in South Africa and a better demand outlook the
day after the Fed pledged to pump $40 billion monthly into the
U.S. economy until it saw a sustained upturn in the jobs market.
    Investors looking to gold as a traditional inflation hedge
in times of accommodative monetary policy put bullion on track
to rise for a fourth straight week for the first time since
    The European Central Bank has also unveiled an aggressive
plan to tackle the three-year old debt crisis there, while
China's Premier Wen Jiabao also said this week the government
could utilise a massive fiscal stability fund to boost growth.  
    Spot gold was up 0.4 percent to $1,773.26 an ounce by
12:45 p.m. (1645 GMT) after climbing to an intraday peak of
$1,777.51, its highest since Feb. 29. 
    U.S. COMEX gold futures for December delivery were up
$3.70 at $1,775.80 an ounce, with trading volume set to be
higher than average for a second straight day, preliminary
Reuters data showed.
    Analysts differed on whether gold could keep up the
blistering rally.
    "When multiple major central banks are coordinating their
effort in printing more money and engaging in stimulus measures,
 that has to be overtly bullish for gold," said Adam Sarhan,
chief executive of Sarhan Capital.
    But Tom Kendall, an analyst at Credit Suisse, cautioned that
after the rally in recent weeks, gold could be in for a period
of consolidation.
    And UBS gold strategist Edel Tully said that gold is due to
encounter stiff resistance at an area between $1790 and 1,803,
which were the metal's February and last year's November highs.
    Gold's appeal as an inflation hedge got a boost when the
U.S. Labor Department reported on Friday that consumer prices
rose in August at the fastest pace in more than three years.
    Reuters data shows asset performance has tended to diminish
with each new round of quantitative easing, or QE, from the Fed,
and that it sometimes takes as long as a year for the effects of
Fed action to kick in.
    (Asset reaction to QE:
    Gold investment demand showed no signs of abating. Holdings
of SPDR Gold Trust, the world's biggest gold-backed
exchange-traded fund, inched up 0.2 percent on the day to
1,292.432 tonnes by Sept. 13. 
    Among other precious metals, silver was down 0.3
percent at $34.55 an ounce. Platinum gained 1.9 percent
to $1,708.25, while palladium was up 2.1 percent at
$698.22 an ounce. 
    Platinum is headed for a 8 percent rise on the week, its
biggest weekly gain since last October, due to supply fears
caused by mining labor unrest in South Africa, which is
estimated to own 80 percent of the world's platinum reserves.
 Prices at 12:45 p.m. EDT (1645 GMT)                          
                               LAST      NET    PCT     YTD
                                         CHG    CHG     CHG
 US gold                    1775.80     3.70   0.2%   13.3%
 US silver                   34.380   -0.336  -1.0%   23.2%
 US platinum                1714.00    34.50   2.1%   22.5%
 US palladium                704.00    15.50   2.3%    7.3%
 Gold                       1773.26     6.97   0.4%   13.4%
 Silver                       34.55    -0.09  -0.3%   24.8%
 Platinum                   1708.25    31.55   1.9%   22.6%
 Palladium                   698.22    14.32   2.1%    7.0%
 Gold Fix                   1775.50     3.00   0.2%   12.8%
 Silver Fix                   34.71   171.00   5.2%   23.2%
 Platinum Fix               1697.00     3.00   0.2%   22.9%
 Palladium Fix               702.00    10.00   1.4%   10.4%
 (Additional reporting by Eric Onstad, Rujun Shen in Singapore
and Veronica Brown in London; Editing by David Gregorio)

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