* Fed to spread bond purchases -WSJ []
* Option-related buying, CFTC push silver prices
* Gold to rise to $1,362/oz - technicals []
* Coming up: U.S. new home sales September; 1400 GMT
By Rujun Shen
SINGAPORE, Oct 27 (Reuters) - Gold edged lower on Wednesday
as the market looked set to consolidate ahead of the U.S.
Federal Reserve's decision on further monetary easing next
week, while a stronger dollar also weighed.
Silver initially rose strongly after the U.S. futures
regulator raised an alarm about the silver market on Wednesday.
Delta-hedging -- where option granters buy to cover their
exposure -- against the $24 strike, helped push spot silver to
jump nearly 40 cents to $24.20 earlier in the day, traders
said. Silver later retreated to $23.88.
The most-active COMEX silver contract for December delivery
<SIZ0> gained 0.5 percent at $23.94 after hitting an intra-day
high of $24.3, extending gains in the previous session.
The U.S. Commodity Futures Trading Commission said that
there have been attempts to influence silver prices, but did
not provide any detail on the status of a probe into price
manipulation in silver that started in 2008. []x
For a chart on silver's rise, click:
http://graphics.thomsonreuters.com/AS/0810/RS_20102710124118.jp
g The U.S. Federal Reserve is likely next week to unveil a
programme of U.S. Treasury bond purchases worth a few hundred
billion dollars over several months, reported the Wall Street
Journal.
What the Journal report called a "measured approach"
compares with investors' base-case scenario of an initial
commitment to buy at least $500 billion in Treasury debt over
five months, in an effort to spur lending and to support an
economic recovery that is too weak to tame high unemployment.
[]
The dollar <.DXY> edged up on Wednesday. Its recent
weakness has helped propel gold to record highs. []
"The market is entering a period of consolidation. The euro
is under pressure and the dollar isn't doing a great deal,
making the precious metals market quiet," said Ellison Chu,
manager of precious metals at Standard Bank Asia in Hong Kong.
"We saw some demand from China, where investors still have
good interest in holding gold, despite high prices."
Spot gold <XAU=> edged down 0.3 percent at $1,335.19 an
ounce by 0347 GMT.U.S. gold futures <GCZ0> fell 0.3 percent to
$1,335.2 an ounce.
A bullish target of $1,362 per ounce for spot gold <XAU=>
has been established as per its wave pattern and a Fibonacci
projection analysis, said Wang Tao, a Reuters market analyst.
[]
For a 24-hour technical outlook on gold, see:
http://graphics.thomsonreuters.com/WT/20102710090534.jpg
Spot palladium <XPD=> hit a nine-year high at $636.25 an
ounce, before softening to $626.05.
"Steady industrial demand will continue to push money into
palladium, especially when palladium starts to replace platinum
in autocatalyst," said a Tokyo-based dealer.
The platinum-palladium ratio, used to measure the ounces of
palladium to buy an ounce of platinum, dropped to a 13-year low
of 2.72, compared with an average of 3.19 over the past 25
years.
For a graphic on the ratio, click:
http://graphics.thomsonreuters.com/AS/0810/RS_20102710114640.jp
g
Precious metals prices at 0347 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1335.19 -3.51 -0.26 21.86
Spot Silver 23.88 0.06 +0.25 41.89
Spot Platinum 1703.67 8.72 +0.51 16.13
Spot Palladium 626.05 5.42 +0.87 54.39
Euro/Dollar 1.3808
Dollar/Yen 81.73
(Editing by Manash Goswami)
