By Arpan Mukherjee Of DOW JONES NEWSWIRES WELLINGTON (Dow Jones)--Precious metals edged higher in Asia as investors turned to investment alternatives such as gold ahead of an interest-rate policy meeting of the European Central Bank later in the trading day, as concerns about euro-zone debt refused to fade. Spot gold, which opened a touch lower in the Asian session, was underpinned by its safe-haven appeal amid concerns about long-term trends in currency valuations. The yellow metal has gained around 3% since it hit a low of $1,486.50 a troy ounce on July 1. At 0533 GMT, gold is at $1,533/oz, up $3.60 from its New York close. "Gold's buoyancy is largely attributable to the resurgence of contagion risks within the euro zone," USAGOLD-Centennial Precious Metals Inc.'s resident economist Peter Grant said in a commentary, The yellow metal remains rangebound and continues to show "remarkable resilience at a time of year when the market frequently experiences seasonal softness," he said. Usually, gold demand slows in the summer months, especially in India, the biggest consumer of the precious metal, and picks up after the summer-harvest in September with the onset of the festive season. Investors will be closely watching for the results of the ECB meeting. The bank is expected to raise its key policy rate by 25 basis points to cool euro-zone inflation, which is near two-year highs. A rate hike could boost the euro and also gold, since the yellow metal tends to move inversely with the dollar. However, if ECB president Jean-Claude Trichet signals a hold on its rates, the euro could move lower, which in turn could weigh on gold prices. Gold will continue to find support either way, though, from the ongoing euro-zone debt crisis, as the threat of contagion or the spread of the crisis from Greece to other countries remains, analysts said. Moody's Investor Service Tuesday slashed it's rating on Portugal's sovereign debt to "junk" status, and uncertainty hangs over the status of Ireland's and Spain's. Kitco Metals senior analyst John Nadler said "...additional gains in the metals ought not to be ruled out as the European debt turmoil still presents chain-reaction-like potential dangers and investors might wish to remain on the safe side." Analysts expect resistance for gold between $1,540 and $1,545/oz. Spot silver was trading at $36.28/oz, up 38 cents. Platinum was up $2 at $1,729/oz and palladium up $6 at $772/oz. Both platinum and palladium prices are expected to rise due to supply-side risks and a positive demand trend, especially from the automobile sector and exchange-traded funds, Commerzbank said in a note. The house expects platinum prices to rise to $1,800/oz in the third-quarter and touch $1,900/oz in last quarter of 2011. "The main driver of the recovery was demand for autocatalysts," the house said. Similarly, it expects palladium prices touch $800/oz in the third quarter and $875/oz in last quarter of 2011. -By Arpan Mukherjee, Dow Jones Newswires; 64-4-471-5990; arpan.mukherjee@dowjones.com

Source