PRECIOUS-Gold trims losses on risk-aversion after Korea exchange

                                
 * North Korea artillery hits S. Korea island	
                                
 * Gold may rebound to $1,380 - technicals [ID:nSGE6AM01A]	
                                
 * Coming up: U.S. FOMC Nov 2-3 meeting minutes; 1900 GMT	
                                
 	
                                
 (Adds comment, details; updates prices)	
                                
 By Rujun Shen	
                                
 SINGAPORE, Nov 23 (Reuters) - Gold trimmed early losses on 	
Tuesday after a major exchange of artillery fire on the Korean 	
peninsula boosted appetite of the safe-haven asset, as well as 	
the dollar.	
                                
 North Korea on Tuesday fired dozens of artillery shells at 
a 	
South Korean island, setting buildings on fire and prompting a 	
return of fire by the South, Seoul's military and media reports 	
said. [ID:nL3E6MN09Z]	
                                
 "It tends to add to the already quite risk-averse 	
environment, surrounding European issues and Ireland," said 
Daniel Major, an analyst at RBS. It also comes along with 
"weak month-on-month commodity imports by China with potential 
implications of policy tightening, and sales of state 
stockpiles to curb inflation."	
                                
 Spot gold moved back to positive territory 	
briefly after falling as much as 0.6 percent to $1,357.7 	
earlier in the day. It was trading at $1,364.15 an ounce at 
0742 GMT, down 0.1 percent.	
                                
 U.S. gold futures gained 0.2 percent to $1,361 an 	
ounce.	
                                
 The dollar and U.S. Treasuries rose and U.S. stock futures 	
fell on Tuesday.  
                                
 "This is a trigger for the 'risk off' button. You'll  	
certainly see selling in risk-based markets like equities and  	
commodities until we get a better read on events," Mark Pervan, 
 	
senior commodities analyst at ANZ in Melbourne.	
                                
 "There should be reasonable support for gold although we 	
often see a firmer dollar as the initial reaction to risk and 	
lower gold prices, but industrial metals might get hit, oil, 
too."	
                                
 Ireland begins two nervous weeks of political maneuvering 
on 	
Tuesday as the government dares the opposition to block an 	
austerity budget on which a multi-billion euro EU/IMF bailout 
Is 	
riding. [ID:nLDE6AL2AG]	
                                
 "Gold is likely to be rangebound in the near future, with 	
$1,340 being a good support level. The outlook is still firm, 
as 	
the European debt situation is not very optimistic," said a 	
Singapore-based dealer.	
                                
 Physical selling at round $1,365 was spotted in early Asian 	
trade, but overall trade was scarce, especially as Japan was 	
closed for a public holiday, the dealer added.	
                                
 Spot gold is expected to rally towards $1,380 per ounce as 
it completed a consolidation between $1,342 and $1,363, and is 	
poised to rise further, according to Reuters market analyst 
Wang 	
Tao. 
                                
 For a graphic of the 24-hour gold technical outlook, see:	
 http://graphics.thomsonreuters.com/WT/20102311091728.jpg	
                                
 Gold is well supported by the uncertainties in Ireland's 	
fiscal stability, traders and analysts said.	
                                
 "Precious metals have good support, as the situation in 	
Europe is still unstable despite the rescue package," said a 	
trader based in Hong Kong. "It has attracted funds in 
safe-haven 	
buying."	
                                
 "Liquidity is going to dry out later this week due to the 	
Thanksgiving holiday in the U.S. But the thin liquidity might 	
exaggerate price moves."	
                                
 With the U.S. Thanksgiving holiday around the corner, 	
investors are watching for a batch of data, as well as minutes 	
from the Federal Reserve's meeting on Nov 2-3, where the Fed 	
decided to launch its $600 billion bond purchase programme.	
                                
 Spot silver lost nearly one percent to $27.56 an 	
ounce.	
                                
 Holdings in the iShares Silver Trust , the world's 	
largest physically-backed exchange-traded fund, hit a record 
high of 10,841.98 tonnes by Nov 22. [ID:nSGE6AL0SG]	
                                
 	
                                
 Precious metals prices at 0742 GMT	
 Metal             Last    Change  Pct chg  YTD pct chg Turnover	
 Spot Gold        1364.15   -1.94   -0.14     24.50             
 	
 Spot Silver        27.56   -0.26   -0.93     63.76             
 	
 Spot Platinum    1651.99   -8.01   -0.48     12.61             
 	
 Spot Palladium    682.72   -8.25   -1.19     68.36             
 	
 	
 (Editing by Manash Goswami)	
 
 
 
                                
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