* Gold may fall towards $1,290-technicals
* Coming Up: ADP employer services report; 1315 GMT
(Updates prices)
By Lewa Pardomuan
SINGAPORE, Feb 2 (Reuters) - Gold dropped on Wednesday as
rising equities and hopes for further economic recovery in the
United States prompted some investors to shift to riskier
assets, but lower prices could spur bargain hunting from
jewellers.
The safe-haven appeal of gold was also dented by easing
tensions in Egypt after President Hosni Mubarak said he would
surrender power in September, offering a mixture of concessions
and defiance to Egyptians who marched a million strong to demand
his 30-year-rule end immediately.
Investors awaited the release of the ADP Employer Services
report at 1315 GMT, which could be supportive for U.S. stocks
and the dollar if the numbers were better than expected. Most
recent U.S. indicators have suggested the economy is picking up
steam.
Spot gold fell $4.55 to $1,335.90 an ounce by 0709
GMT -- well below a lifetime high around $1,430 struck in
December. Trading slowed to a trickle in Asia ahead of the Lunar
New Year celebration.
"If we see employment and job creations start to pick up, it
will add on to the prevailing sense of economic optimism in the
market," said Ong Yi Ling, investment analyst at Phillip Futures
in Singapore.
"So gold could come under some pressure as investors move
into other risk assets like equities and industrial metals. I
think I will look at first support for gold at about $1,325 and
the next level will be about $1,300."
Asian stocks jumped on Wednesday and the dollar sank as a
surge in U.S. manufacturing and strong company earnings
convinced investors to pile back into riskier assets despite the
turmoil in Egypt.
ADP Employer Services report later in the day is expected to
show U.S. private employers added 145,000 jobs in January.
Forecasts from economists polled by Reuters range from 75,000 to
250,000.
U.S. gold futures for April reversed earlier gains
and dropped $3.2 an ounce to $1,337.1 an ounce. It had settled
around $5 higher on weaker U.S. dollar.
Spot gold may resume its downtrend this week and fall
to $1,290-$1,280 this week, as it is unable to break above an
upper channel line resistance at $1,346, according to Wang Tao,
a Reuters market analyst for commodities and energy technicals.
For a weekly gold technical outlook:
http://graphics.thomsonreuters.com/WT/20110202093908.jpg
In the physical market, dealers noted buying interest from
several buyers in Asia, keeping premiums for gold bars steady at
their highest levels in at least seven years in Singapore and
Hong Kong.
"Things have slowed down but we receive orders from clients
from Thailand and India. Premium remains at $1.90 at my end,"
said a dealer in Singapore.
Gold imports in India, the world's largest consumer of the
precious metal, rose 18 percent in January to 40 tonnes
provisionally, and next month's wedding season could further
boost demand, head of a trade body said.
In India, which accounts for 20 percent of global demand
for jewellery, gold is widely given in religious celebrations
and weddings.
Precious metals prices 0709 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1335.90 -4.55 -0.34 -5.89
Spot Silver 28.42 -0.07 -0.25 -7.91
Spot Platinum 1826.24 1.24 +0.07 3.32
Spot Palladium 819.10 -0.37 -0.05 2.45
TOCOM Gold 3519.00 -15.00 -0.42 -5.63 43948
TOCOM Platinum 4844.00 52.00 +1.09 3.15 12761
TOCOM Silver 74.70 0.50 +0.67 -7.78 943
TOCOM Palladium 2163.00 -6.00 -0.28 3.15 337
Euro/Dollar 1.3835
Dollar/Yen 81.52
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Himani Sarkar)
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