* Gold steady, ending year of peaks with range-bound trade
* Silver, platinum, palladium return to positive territory
* Gold biased to rise-technicals []
(Updates prices paragraphs 2-3, quote paragraph 4. Previous
dateline SINGAPORE)
NEW YORK, Dec 27 (Reuters) - Spot gold regained lost ground
on Monday, as bargain hunting trickled in after prices dropped
about 1 percent in early trade in response to China's interest
rate increase on Saturday.
Spot gold <XAU=> slipped $2.85 an ounce to $1,381.40 by
11:46 a.m. EST (1646 GMT), sticking within the narrow range of
the past two weeks after this year's over 26 percent rally to a
series of record highs began to run out of steam.
U.S. gold futures <GCG1> pulled back from a 0.4-percent
decline to rise by 0.14 percent to $1,382.40.
"Gold continues better even though China raised rates as at
the same time they now have a program allowing retail
accumulation of gold-retail sales...and as some people look at
treasuries again lower rates mean cheaper holding of gold is
possible," said George Gero of RBC Wealth Management.
With liquidity reduced both by London holidays on Monday
and Tuesday as well as a massive snowstorm in the U.S. eastern
seaboard that disrupted New York area transit, most financial
markets saw thin trade and small moves.
The euro continued to flirt with its 200-day moving average
against the dollar, while the dollar index <.DXY> inched down
just 0.11 percent, giving bullion little direction. []
U.S. Treasury debt prices weakened on Monday, and two-year
note yields broke above recent technical supports as dealers
set up for a $35 billion auction, which analysts expect will
need to price at a concession to generate interest. []
The day's main news point was the Chinese central bank's
decision to raise interest rates on Saturday for the second
time in just over two months as it steps up its battle to rein
in stubbornly high inflation. []
Commodity markets pared early losses after the initial
selling-off, focusing instead on positive fundamentals and
threats to supply. []
"The market had been worried about more tightening moves
from China. Now that the news is out, it almost came as a
relief," said Li Ning, an analyst at Shanghai CIFCO Futures.
Spot gold is technically neutral as it is rangebound
between $1,360 and $1,392 per ounce, but the bias seems to be
with the bulls, Reuters market analyst Wang Tao said. []
(Gold technical outlook: http://link.reuters.com/nyv73r)
Robust physical demand in the region was seen supporting
the sentiment in the precious metals market.
"Some speculators liquidated their positions earlier, but
we also see very good physical demand in the market today,"
said Peter Fung, head of dealing department at Wing Fung
Precious Metals in Hong Kong.
"Gold is likely to be traded in the range of $1,360 to
$1,390. In the medium-term, gold is still looking up."
Prices at 12:02 p.m. EST (1702 GMT)
LAST NET PCT YTD
CHG CHG CHG
US gold <GCG1> 1382.00 1.50 0.1% 26.1%
US silver <SIH1> 29.235 -0.093 -0.3% 73.6%
US platinum <PLF1> 1734.10 11.00 0.6% 17.9%
US palladium <PAH1> 765.50 7.40 1.0% 87.2%
Gold <XAU=> 1381.39 -2.86 -0.2% 26.0%
Silver <XAG=> 29.19 -0.02 -0.1% 73.3%
Platinum <XPT=> 1730.24 7.74 0.4% 18.1%
Palladium <XPD=> 761.47 8.47 1.1% 87.8%
Gold Fix <XAUFIX=> 1380.50 7.00 0.5% 25.0%
Silver Fix <XAGFIX=> 29.07 -11.00 -0.4% 71.1%
Platinum Fix <XPTFIX=> 1725.00 5.00 0.3% 17.7%
Palladium Fix <XPDFIX=> 764.00 12.00 1.6% 90.0%
(Additional reporting by Rujun Shen in Singapore; Editing by
Lisa Shumaker)
