* Japan's Fukushima nuclear plant conditions slowly improve
* Gold may retrace to $1,416 - technicals
* Coming soon: U.S. unemployment claims, weekly; 1230 GMT
(Updates prices)
By Rujun Shen
SINGAPORE, March 23 (Reuters) - Gold prices steadied on
Wednesday, as escalating unrest in the Middle East and North
Africa underpinned safe-haven demand, but a modest rebound in
the dollar could weigh on the sentiment as fears on Japan's
nuclear crisis eased.
The troubles in the Middle East turned increasingly violent
with Syrian troops opening fire on protesters and Yemen's
president warning that the country would slip into civil war if
he was forced to quit.
"Gold is still taking its cue from the situation in the
Middle East," said Ong Yi Ling, an analyst at Phillip Futures,
adding that it could increase safe-haven flows into the precious
metal.
Oil prices have moved in tandem with gold since the Middle
East tensions broke out at the end of January. Lofty oil prices
have stoked worries of inflation down the road, adding to gold's
allure as an inflation hedge.
Spot gold was little changed at $1,428.50 an ounce by
0656 GMT. U.S. gold futures was nearly flat at $1,428.80.
Bullion has been moving in a narrow range of $4 in the past
two sessions, lacking momentum for a further rise on easing
fears over Japan's nuclear crisis, even though the battle to
contain the problem was ongoing and concerns on food
contamination are rising.
Profit-taking was spotted as prices rose towards $1,430,
seen as a key resistance level, traders said.
"Investors don't know what to do -- we see profit-taking at
the high price range, but fears of inflation as well as the
Middle East crisis triggers buy-back by speculators when prices
go down," said a Hong Kong-based dealer.
Improving outlook for developed economies, including the
United States, has prompted some investors to move into riskier
assets such as equities, he added.
Technical analysis showed that unless gold effectively
breaks above the pivotal resistance at $1,435, market sentiment
might be bearish, pressuring prices down to $1,416, said Reuters
market analyst Wang Tao.
Investors are also eyeing the currency market. The dollar
index edged up after sinking to a 15-month low in the
previous session, as the euro hovered below a 4-1/2 month high.
Sovereign debt problems in Portugal and Ireland sapped
appetite for the single currency, as Portugal's parliament will
vote on the government's latest austerity measures on Wednesday.
A rebound in the dollar could hurt sentiment on commodities.
Spot silver inched down 0.3 percent to $36.22, just
off the 31-year high of $36.70 hit on March 7.
Precious metals prices 0656 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1428.50 -1.00 -0.07 0.64
Spot Silver 36.22 -0.12 -0.33 17.37
Spot Platinum 1735.24 3.24 +0.19 -1.83
Spot Palladium 733.75 0.75 +0.10 -8.22
TOCOM Gold 3723.00 -2.00 -0.05 -0.16 35309
TOCOM Platinum 4541.00 -24.00 -0.53 -3.30 10922
TOCOM Silver 93.90 0.20 +0.21 15.93 1324
TOCOM Palladium 1927.00 -26.00 -1.33 -8.11 154
COMEX GOLD APR1 1428.80 1.20 +0.08 0.52 6276
COMEX SILVER MAY1 36.28 0.01 +0.02 17.24 3044
Euro/Dollar 1.4159
Dollar/Yen 80.85
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Editing by Ed Lane)
Reuters
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