* Gold expected to move higher, but at slower pace
* Gold may fall towards $1,370 - technicals[]
* Coming up: U.S. ISM Manufacturing PMI, Dec; 1500 GMT
(Updates prices)
By Rujun Shen
SINGAPORE, Jan 3 (Reuters) - Spot gold prices were steady
on Monday, after posting a 30 percent gain last year, and
silver rose to a 30-year peak above $31 on a bullish market
outlook for this year, but a stronger dollar weighed.
The dollar gained nearly half a percent on Monday,
building on gains from 2010, as investors gear up for gains in
early 2011 on expectations the U.S. economic recovery was
gaining momentum.
"This morning some profit-taking interest depressed the
market, but gold still has very good support from fresh buying
and short-covering," said Peter Fung, head of dealing
department at Wing Fung Precious Metals in Hong Kong, adding
that any dip below $1,400 will trigger buying interest.
Fung expected gold to trade in the range of $1,410 to
$1,425 during the first trading day of the year, when volumes
were still thin as key market players including China, Japan
and Australia were out of action on holiday.
Spot gold was little changed at $1,418.90 an ounce
by 0844 GMT. It touched $1,421 earlier, just shy of a
three-week high of $1,421.15 hit on Dec 31.
U.S. gold futures edged down 0.1 percent to $1,419.5.
Supportive of market sentiment, India said it has given
approval to seven more banks to import gold and silver,
bringing the number of banks with gold-import license to 30.
The move was seen to smoothen the flow into the world's top
gold consumer. []
"These banks now can import directly, get more customers
and increase trading volumes. It could mean more imports,"
said a Singapore-based dealer, who, however, added that these
banks were small players in the market.
Gold and other precious metals still enjoy bullish
outlook, as economic uncertainties and inflation worries keep
fanning safe-haven demand, while an improved economic outlook
underpins strength in silver as well as platinum group metals,
which are used in various industries.
"Everything is still looking good for gold," said a second
Hong Kong-based dealer.
"It's just a matter of time when gold strikes a new high.
Gold will continue to go higher, but slower, as people will
become more cautious at price levels of $1,500 or $1,600."
Investors are eyeing Friday's non-farm payroll data for
December out of the United States, which is expected to show
an improvement from the previous month, consistent with other
signs that the economy is strengthening. []
On the same day, Federal Reserve Chairman Ben Bernanke is
scheduled to testify on the economic outlook before Congress.
TECHNICALS LESS BULLISH
Technicals project a less positive picture.
Spot gold is expected to fall towards $1,370 per
ounce, as its wave pattern indicates a completion of a wave
(5), and a deep correction may follow, according to Reuters
market analyst Wang Tao. []
In the first quarter, gold may be bound in a range between
$1,144 and $1,214 an ounce, based on its wave pattern and a
Fibonacci retracement analysis, Wang also said. []
Spot silver touched a 30-year high of $31.02, and
retraced to $30.92. It posted an 83 percent gain in 2010,
following top performer palladium's 97 percent rise.
Holdings in the world's largest silver-backed
exchange-traded fund, iShares Silver Trust , rose for the
first time since Dec. 17 to 10,921.57 tonnes by Dec. 31 from
10,903.34 tonnes.
Spot platinum rose to $1,775.50, its highest since
Nov 10, before easing to $1,772.
Precious metals prices 0844 GMT
Metal Last Change Pct chg YTD pct chg
Spot Gold 1418.90 -0.55 -0.04 -0.04
Spot Silver 30.92 0.06 +0.19 0.19
Spot Platinum 1772.00 4.50 +0.25 0.25
Spot Palladium 798.47 -1.03 -0.13 -0.13
(Editing by Ed Lane)
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