* Gold lifted by inflation worry; China hike less likely
* Technical buying as bullion breached 50-day, 100-day MA
* Paulson, Soros kept big gold bets, sentiment improved
* Coming up: U.S. producer prices, housing starts Wed.
(Recasts, adds comments, updates prices, new byline and
dateline, previously LONDON)
By Frank Tang
NEW YORK, Feb 15 (Reuters) - Gold prices rose to a
four-week high on Tuesday as inflation worries sparked a
technical breakout, and as Chinese data curbed expectations for
further interest rate hikes there.
Bullion investor sentiment improved after U.S. regulatory
filings confirmed that top hedge fund mangers, such as John
Paulson and George Soros, held their big bets on gold in the
fourth quarter of last year.
(Graphic: http://link.reuters.com/sar97r)
"The inflation mentality is beginning to take hold more,
and that sparked gold's rise today," said Adam Hewison,
president of MarketClub.com.
Gold benefited after data showed inflation in Britain
jumped to twice the Bank of England's target in January.
[]
In China, lower-than-forecast inflation eased pressure for
an imminent rate hike, which would weigh on gold, but price
pressures excluding food were their strongest in at least a
decade. []
Spot gold <XAU=> rose 0.9 percent to $1,374.20 an ounce by
1:46 p.m. EST (1846 GMT), having earlier hit a four-week high
at $1,376.50. U.S. gold futures for April delivery <GCJ1>
settled up $9 at $1,374.10 an ounce.
Silver <XAG=> gained 0.6 percent to $30.78 an ounce.
Holdings of the world's largest silver-backed ETF, New York's
iShares Silver Trust, rose on Monday by 22.78 tonnes, their
biggest one-day rise since Jan. 24.
U.S. filings showed that hedge funds largely shed positions
in the No. 1 silver ETF in the fourth quarter. []
The gold-silver ratio -- the number of silver ounces needed
to buy an ounce of gold -- held below 45, a key area near its
lowest level in five years, despite gold's outperformance over
silver on Tuesday.
Gold was on track for a third week of gains, recovering
from the losses it made in January, when rising appetite for
risk fueled buying of higher-yielding assets.
"Some risk aversion has returned -- some euro zone jitters
with WestLB and ECB buying of Portuguese bonds last week, and
the unsettled Middle Eastern situation," said Credit Agricole
analyst Robin Bhar.
TECHNICAL BREAKOUT?
Some analysts called gold's rally on Tuesday a technical
breakout as bullion broke above key resistance at its 50-day
and 100-day moving averages.
MarketClub's Hewison said his technical models showed that
a buy signal was triggered when prices rose above $1,368 an
ounce, after breaching the 100-day moving average at $1,365.
A softer dollar initially underpinned the precious metal,
although the usual inverse relationship between the two assets
has been erratic recently. []
(Graphic: http://link.reuters.com/jup97r)
Data released earlier showed Chinese inflation at a
lower-than-expected 4.9 percent in January, curbing
expectations for further rate rises from China's central bank.
Lower interest rates tend to support gold buying.
"On the face of it, it's a good number, but, when you look
at the detail and what they have done to the basket, you might
think it was going to come in lower anyway," said Bhar.
"Probably for gold this is bullish, because inflation is
running higher than this rejigged (data) is showing," he said.
Some pressure also has come off gold after outflows from
exchange-traded funds backed by the precious metal petered out.
Holdings of the largest gold ETF, New York's SPDR Gold Shares
<GLD>, have held steady for the past three sessions.
ETF Securities, a provider of exchange-traded funds backed
by physical metal, and asset manager BlackRock <BLK.N>
estimated that investors pulled just over $2 billion from
commodity exchange-traded products in January. []
Platinum <XPT=> gained 0.2 percent to $1,828.50 an ounce,
while palladium <XPD=> climbed 0.7 percent to $837.50.
Palladium rallied to a decade high at $847 an ounce before
drifting lower. Reduced expectations that China will tighten
monetary policy has supported industrial commodities such as
platinum group metals, which are chiefly used in catalytic
converters.
Prices at 2:09 p.m. EST (1909 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1374.10 9.00 0.7% -3.3%
US silver <SIH1> 30.696 0.162 0.0% -0.8%
US platinum <PLJ1> 1831.60 4.00 0.2% 3.0%
US palladium <PAH1> 839.90 7.10 0.9% 4.6%
Gold <XAU=> 1374.40 12.73 0.9% -3.2%
Silver <XAG=> 30.78 0.19 0.6% -0.3%
Platinum <XPT=> 1825.99 0.50 0.0% 3.3%
Palladium <XPD=> 837.50 6.00 0.7% 4.8%
Gold Fix <XAUFIX=> 1372.75 0.50 0.0% -2.7%
Silver Fix <XAGFIX=> 30.72 56.00 1.9% 0.3%
Platinum Fix <XPTFIX=> 1842.00 2.00 0.1% 6.4%
Palladium Fix <XPDFIX=> 845.00 8.00 1.0% 6.8%
(Additional reporting by Amanda Cooper and Jan Harvey in
London; Editing by Walter Bagley)
