* HK premium narrows on sufficient supply, low buying
interest
* Spot gold targets range $1,385-$1,390
-technicals
* Coming up: U.S. Consumer Prices Jan; 1330 GMT
(Updates prices; adds Bahrain move)
By Rujun Shen
SINGAPORE, Feb 17 (Reuters) - Spot gold was slightly
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
said Iranian warships were trying to traverse the Suez Canal and
riots broke out in Libya.
In the latest development, more than a dozen army tanks and
several military trucks and ambulances were seen travelling
along a main highway in central Manama on Thursday, shortly
after Bahrain police cleared a protest square in the capital.
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 the 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."
Premiums for gold bars 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 had eased, dealers
said.
Spot gold gained 0.3 percent at $1,378.15 an ounce by
0514 GMT, after hitting a one-month high of $1,381.84 in the
previous session.
U.S. gold futures also rose by 0.3 percent to
$1,378.80.
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-hour 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.
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
$841.97 an ounce, below a decade-high of $847 hit on Feb 15.
Precious metals prices 0514 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1378.15 3.95 +0.29 -2.91
Spot Silver 30.71 0.08 +0.26 -0.49
Spot Platinum 1831.00 4.26 +0.23 3.59
Spot Palladium 841.97 4.00 +0.48 5.31
TOCOM Gold 3714.00 8.00 +0.22 -0.40 34804
TOCOM Platinum 4980.00 11.00 +0.22 6.05 10078
TOCOM Silver 82.20 -0.20 -0.24 1.48 920
TOCOM Palladium 2266.00 11.00 +0.49 8.06 329
COMEX GOLD APR1 1378.70 3.60 +0.26 -3.00 5316
COMEX SILVER MAR1 30.72 0.09 +0.28 -0.73 2247
Euro/Dollar 1.3570
Dollar/Yen 83.56
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Editing by Clarence Fernandez)
Reuters
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