* Gold up as euro firms after Portuguese debt auction
* Euro zone could reach package to solve bloc's crisis
* Bullion could face pressure below 50-day MA
* Coming Up: US producer prices, jobless claims Thursday
(Recasts, updates prices to market close, adds link to
graphic, new byline, changes dateline, previously LONDON)
By Frank Tang
NEW YORK, Jan 12 (Reuters) - Gold rose to a one-week high
on Wednesday as the dollar fell sharply against the euro, but
news that Europe could reach a comprehensive package in the
next two months to solve the bloc's debt crisis put a damper on
safe-haven demand.
Analysts said bullion could face strong resistance at its
50-day moving average near $1,383 an ounce. Gold has been
largely rangebound after notching its biggest weekly loss in
seven months last week due to a more positive U.S. economic
outlook.
The dollar fell against the euro for a third day,
benefiting gold, though traders said euro's gains were
short-lived, with a Portuguese debt sale failing to stem fears
on the funding prospects of peripheral euro zone countries.
[]
"Gold is being held because of uncertainty, and more than
anything because of the fear factor that has been evident since
the financial crisis," said Credit Agricole analyst Robin
Bhar.
"As the economy strengthens, as financial markets
normalize, and in the absence of any further shocks... that is
one driver for gold that will start to unravel," Bhar said.
Major euro zone states are working on a comprehensive
medium-term package to solve the bloc's debt crisis and could
reach agreement in the next two months, Germany's finance
minister said. []
Spot gold <XAU=> rose 0.5 percent to $1,386.95 an ounce at
3:19 p.m. EST (2019 GMT), having earlier hit a high at
$1,388.90. U.S. gold futures for February delivery <GCG1>
settled up $1.50 an ounce at $1,385.50.
Silver <XAG=> rose 0.4 percent to $29.61 an ounce.
COMEX gold futures volume was in line with its 30-day
average, but silver was about 25 percent lower, preliminary
Reuters data showed.
While a possible euro zone rescue package removed some of
the need among investors for safe-haven assets, this persistent
concern over the indebtedness of smaller euro zone economies is
likely to continue to support gold, analysts said.
"With the euro still deep (in the) debt crisis and
physicals using every dip to buy the metal on anticipation of
an extended rise, there is little downside possibility for
gold, at least in this quarter," said Pradeep Unni, senior
analyst at Richcomm Global Services.
"Weakness in the dollar and rising oil will add to
the...reasons to hoard gold."
U.S. crude oil futures rose after a government inventory
report showed crude stocks fell more than expected last week.
[]
U.S. crude also rose to within a few dollars of its recent
more than two-year high. Rising oil prices can fuel demand for
commodities as an asset class, lifting gold.
50-DAY AVERAGE IN FOCUS
On charts, gold on Wednesday largely traded below its
50-day average, which has tended to define the metal's bull
move since mid-September of last year, independent investor
Dennis Gartman said. (Graphic: http://link.reuters.com/neq95r)
"For the first time in a very long while, we shall inject a
note of caution to owning gold in any form...We shall recommend
'shoring up' stops to protect what we have gained over the past
many months," Gartman said.
Demand for gold to back exchange-traded funds eased off
further, meanwhile, with holdings of the largest, New York's
SPDR Gold Trust <GLD>, slipping just over 1 tonne on Tuesday.
Its holdings have declined more than 9 tonnes since the start
of the year. []
Platinum <XPT=> rose 1.8 percent to $1,797.74 an ounce,
while palladium <XPD=> climbed 3.1 percent to $806.22.
Prices at 3:38 p.m. EST (2038 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCG1> 1385.80 1.50 0.1% -2.5%
US silver <SIH1> 29.545 0.046 0.0% -4.5%
US platinum <PLJ1> 1797.90 30.30 1.7% 1.1%
US palladium <PAH1> 806.75 23.00 2.9% 0.4%
Gold <XAU=> 1386.67 6.22 0.5% -2.3%
Silver <XAG=> 29.62 0.12 0.4% -4.0%
Platinum <XPT=> 1797.49 31.50 1.8% 1.7%
Palladium <XPD=> 806.22 24.22 3.1% 0.8%
Gold Fix <XAUFIX=> 1378.75 -4.75 -0.3% -2.2%
Silver Fix <XAGFIX=> 29.60 6.00 0.2% -3.4%
Platinum Fix <XPTFIX=> 1793.00 4.00 0.2% 3.6%
Palladium Fix <XPDFIX=> 803.00 2.00 0.2% 1.5%
(Reporting by Frank Tang; Additional reporting by Jan Harvey
in London; Editing by Marguerita Choy)
