Mon May 30, 2011 3:07am EDT * Shanghai Gold Exchange raises margins before holiday * Gold may retrace to $1,513/oz-technicals [ID:nL3E7GU010] (Updates prices; adds detail) By Rujun Shen SINGAPORE, May 30 (Reuters) - Gold held steady on Monday, buoyed by the ongoing debt crisis in the euro zone, while silver trimmed gains as a hike in margins by the Shanghai Gold Exchange kept sentiment in check. The Shanghai bourse plans to temporarily increase margins on gold and silver forward contracts on settlement at June 2 and trading limits on June 3, before the market closes for a public holiday on June 6 to dampen a surge in volumes. [ID:nL3E7GU06Q] Spot gold was little changed at $1,535.89 an ounce by 0636 GMT, after rising 1.8 percent in the previous session. U.S. gold GCcv1 was nearly flat at $1,536. "The margin hike in Shanghai Gold Exchange is adding pressure to prices," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong. "But precious metals are holding well, as the euro remains firm and oil prices are staying above $100." EURO, U.S. ECONOMY The euro weakened against the dollar on Monday, but retained some of the support earned on Friday when the Greek central bank chief was quoted as saying that the country will repay its debts in full. [ID:nFAT007211] Still, the crisis remains in focus as angry Greeks took to the streets of Athens denouncing the government and the IMF on Sunday, amid talks that Greece may restructure its debt. European Union and IMF officials are expected to deliver their verdict this week on Greece's faltering drive to bring its budget deficit under control. [ID:nLDE74T005] Fung said $1,500 should offer strong support to gold, and prices are likely to reach $1,600 by the end of the year as investors continue to buy bullion to protect themselves against economic uncertainties, a view echoed by other market players. "The speculators are coming back, mainly driven by the European debt crisis," said a Singapore-based trader. "Gold is likely to slowly move up during the summer unless we see big headlines, such as the U.S. raising interest rates earlier than expected." Sluggish consumer spending and a seven-month low pending home sales in April stoke worries that the U.S. economic recovery was losing momentum at beginning of the second quarter. [ID:nN271881] The U.S. and UK markets are closed on Monday on public holidays. Technical analysis suggested that spot gold may retrace to $1,513, said Reuters market analyst Wang Tao. [ID:nL3E7GU010] Spot silver rose as much as 1.3 percent to $38.36, before easing to $38.09. U.S. silver SIcv1 gained 0.6 percent to $38.10. SHANGHAI Shanghai silver forward was trading at 8,300 yuan a kilogram, or about $39.72 an ounce. Enthusiasm for silver investment in China, the world's second biggest gold consumer, has expanded rapidly over the past two months. The average daily trading volume on Shanghai silver forward so far in May stood at 973,344.5 kilogram (31 million ounces), compared with an average of 151,965.9 kilogram in 2010. Precious metals prices 0636 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1535.89 -0.50 -0.03 8.20 Spot Silver 38.09 0.21 +0.55 23.43 Spot Platinum 1797.49 10.79 +0.60 1.70 Spot Palladium 757.22 2.27 +0.30 -5.29 TOCOM Gold 3999.00 16.00 +0.40 7.24 37811 TOCOM Platinum 4719.00 16.00 +0.34 0.49 7106 TOCOM Silver 98.90 1.00 +1.02 22.10 1702 TOCOM Palladium 1977.00 2.00 +0.10 -5.72 137 COMEX GOLD JUN1 1536.00 -0.30 -0.02 8.06 621 COMEX SILVER JUL1 38.10 0.23 +0.61 23.13 3576 Euro/Dollar 1.4273 Dollar/Yen 80.80 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)

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