* Gold rises further, holds above $1,200
* For the technicals on gold, click []
* Coming up: ECB rate decision; 1145 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, July 8 (Reuters) - Gold rose to hold above
$1,200 an ounce on Thursday as strong physical buying kicked in
after a recent drop to a six-week low, while sentiment was also
lifted by gains in equities markets.
The Nikkei jumped nearly 3 percent after U.S. stocks logged
their best one-day gain in about six weeks on optimism about
the coming earnings season, discouraging speculators from
selling gold to cover losses in other markets. [] []
Gold <XAU=> added $3.50 to $1,205.35 an ounce by 0254 GMT.
It had dropped to its weakest since May 25 at $1,185.05 on
Wednesday, or around 6 percent below a record high struck late
in June, before regaining strength.
Gold would have to crack a June level around $1,230 to
sustain gains, but a rebound to the current level prompted
investors to start accumulating long positions again. Silver,
platinum and palladium also bounced from Wednesday's lows.
"There will also be people who start to see that the
decline of the past few sessions is healthy and allows
technical indicators to unwind from their overbought
conditions," said Ong Yi Ling, investment analyst at Phillip
Futures in Singapore.
"Tough resistance will be that $1,230 level. If it can go
pass that level, it will really signal a return to the bullish
uptrend."
For a graphic of the 24-hour gold technical outlook,
click:
http://graphics.thomsonreuters.com/gfx/WT_20100807094151.jpg
U.S. gold futures for August delivery <GCQ0> rose $6.9 an
ounce to $1,205.8 an ounce.
The world's largest gold-backed exchange-traded fund, SPDR
Gold Trust <GLD.P> said its holdings were unchanged at
1,316.481. The holdings hit a record at 1,320.436 tonnes on
June 29. []
The physical sector saw buying interest from Indonesia and
Thailand, but consumers were not too aggressive after prices
crossed $1,200 level again.
The lukewarm attitude to gold reiterated by China's State
Administration of Foreign Exchange was unlikely to have
long-term repercussions in bullion markets, although some
analysts believed the comments may be a feint to keep domestic
prices in check. []
"There's still some buying but I guess most people are now
waiting for delivery. Physical buying is still there and my
premiums have gone up to 80 cents," said a physical dealer in
Singapore, who offered gold bars at 70-cents premium earlier
this week.
Jewelllers in India have been stocking up ahead of
religious festivals, and other physical buyers in Asia snapped
up bullion after prices fell. [] []
India, which accounts for more than 20 percent of global
demand, will celebrate the Hindu festival of Raksha Bandhan on
Aug 24, Janmasthami and Ganesh Chaturthi in September.
[]
A firmer euro also supported gold. The single currency held
near a seven-week high against the dollar on Thursday, with an
upbeat day on Wall Street underpinning improved tolerance for
risk. []
The European Central Bank holds a news conference later in
the day after its monthly meeting, and will face pressure to
say whether Europe-wide stress tests on banks will be tough
enough to convince markets of their worth. []
Precious metals prices at 0254 GMT
Metal Last Change Pct chg YTD pct chg
Turnover
Spot Gold 1205.35 3.50 +0.29 10.01
Spot Silver 18.11 0.11 +0.61 7.61
Spot Platinum 1531.25 7.75 +0.51 4.38
Spot Palladium 446.25 0.25 +0.06 10.05
TOCOM Gold 3436.00 92.00 +2.75 5.43
37628
TOCOM Platinum 4381.00 149.00 +3.52 0.00
13851
TOCOM Silver 52.10 1.80 +3.58 0.77
356
TOCOM Palladium 1277.00 57.00 +4.67 9.61
158
Euro/Dollar 1.2663
Dollar/Yen 88.36
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Editing by Himani Sarkar)
