* Premium narrows on sufficient supply, low buying interest
* Spot gold targe range $1,385-$1,390 - technicals
* Coming up: U.S. Consumer Prices Jan; 1330 GMT
(Adds details, comments; updates prices)
By Rujun Shen
SINGAPORE, Feb 17 (Reuters) - Spot gold was a tad stronger
on Thursday, on course for a fourth straight day of gains, as
escalating tensions in the Middle East buoyed sentiment, though
physical demand remained lackluster.
Investors are closely watching the development of tensions
in the Middle East and North Africa, especially after Israel
alleged Iranian warships were trying to traverse the Suez Canal
and riots broke out in Libya.
But a lackluster physical market would weigh on the
momentum, as buyers shy away after prices have gone up about
$70, or 5 percent, from end of January.
"There's not much activity on the physical market, as prices
have gone up quite a bit from before the Lunar New Year," said a
Hong Kong-based dealer.
"In Asia, buyers are a bit reluctant to get in now, because
they think prices are too high."
Premium for gold bar in Hong Kong had dropped to below $2,
from more than $3 an ounce over London prices, after supply
tightness before the Lunar New Year holiday has eased, dealers
said.
Spot gold gained 0.2 percent at $1,377 an ounce by
0328 GMT, after hitting a one-month high of $1,381.84 in the
previous session.
U.S. gold futures also rose by 0.2 percent at
$1,377.50.
A bullish target range of $1,385-$1,390 remains unchanged
for spot gold as a rising wedge is intact, said Reuters
market analyst Wang Tao.
For a 24-hrs gold technical outlook:
http://graphics.thomsonreuters.com/WT/20111702093619.jpg
Financial markets are waiting for a batch of economic data
out of the United States later on Thursday, including consumer
prices and weekly jobless claims.
"Some investors have been preoccupied with inflationary
concerns," said Ong Yi Ling, an analyst at Phillip Futures, "In
the event that we see a downtick in inflation, gold prices could
come under some pressure."
Data on Wednesday showed that U.S. core wholesale prices
rose in January at their fastest in more than two years, raising
some concerns about inflation, but economists said the recovery
was too weak for a big spike in consumer prices.
The U.S. Federal Reserve officials raised their forecasts
for economic growth last month but remained unhappy with the job
market's recovery, according to minutes of the Fed's policy
meeting in late January.
The brightened economic prospects have lured some investors
to riskier assets such as stocks and weakened gold's appeal.
Holdings in the SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, remained unchanged at its
nine-month low of 1,224.008 tonnes.
Spot palladium gained nearly half a percent at
$841.72 an ounce, just below a decade-high of $847 hit on Feb
15.
Precious metals prices 0328 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1377.00 2.80 +0.20 -2.99
Spot Silver 30.66 0.03 +0.10 -0.65
Spot Platinum 1835.00 8.26 +0.45 3.82
Spot Palladium 841.72 3.75 +0.45 5.28
TOCOM Gold 3711.00 5.00 +0.13 -0.48 29195
TOCOM Platinum 4986.00 17.00 +0.34 6.18 7122
TOCOM Silver 82.20 -0.20 -0.24 1.48 834
TOCOM Palladium 2278.00 23.00 +1.02 8.63 284
COMEX GOLD APR1 1377.50 2.40 +0.17 -3.09 3617
COMEX SILVER MAR1 30.67 0.04 +0.13 -0.87 1883
Euro/Dollar 1.3584
Dollar/Yen 83.57
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Reporting By Rujun Shen; Editing by Ed Lane)
Reuters
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