RTRS:PRECIOUS-Gold edges down as Europe debt worries persist
* Tight liquidity remains a concern in the market
* Spot gold could fall to $1,596/oz - technicals
* Coming up: Italy, austerity vote
(Updates prices)
By Rujun Shen
SINGAPORE, Dec 22 (Reuters) - Gold prices inched down
in thin trade on Thursday as investors remained sceptical of the
euro zone's ability to tackle its debt crisis after the European
Central Bank's latest moves to keep credit flowing in the
region.
Banks gobbled up nearly 490 billion euros in three-year
cut-price loans from the ECB, easing immediate fears of a credit
crunch, but investors doubted if such measures could help solve
the debt crisis, leaving equities and the euro under pressure
and pushing up Italian and Spanish bond yields.
News from the euro zone will continue to dominate the mood
in financial markets. Later in the day, Italian Prime Minister
Mario Monti will face a confidence vote on approving an
austerity package.
"We will probably be trapped in the range of $1,575 and
$1,650 until the year-end," said a Hong Kong-based dealer, "The
market is still focused on the euro zone -- if there will be new
agreement, if the euro zone economy will slide next year, etc."
Spot gold edged down 0.2 percent to $1,612.35 an
ounce by 0724 GMT, off a one-week high of $1,641.50 hit in the
previous session.
U.S. gold was little changed at $1,614.60.
Technical analysis suggested that spot gold could fall to
$1,596 during the day, as a rebound from the Dec. 15 low of
$1,560.36 has been completed, said Reuters market analyst Wang
Tao.
Trading volumes were thin ahead of holidays, as many traders
have closed books for the year. Even the start of a new year in
less then two weeks is unlikely to instantly rekindle enthusiasm
due to the tightened liquidity.
"If we don't see any change on the policy front, the tight
liquidity will extend into the new year," said Hou Xinqiang,
analyst at Jinrui Futures in China.
But Hou said the anticipation of easing monetary policy in
the world's major economies -- the United States, China and
Europe among others -- later in the year would buoy commodities,
including gold.
SPDR Gold Trust, the world's biggest gold-backed
exchange-traded fund, said its holdings fell 12.1 tonnes from
the previous day to 1,267.878 tonnes, the lowest since early
November.
The ETF has lost 30.656 tonnes in holdings so far this
month, but its holdings were still on course for a monthly gain
of more than 35 tonnes, just as cash gold prices were headed for
their first quarterly decline in more than three years.
Precious metals prices 0724 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1612.35 -2.44 -0.15 13.59
Spot Silver 29.30 -0.05 -0.17 -5.06
Spot Platinum 1419.99 -3.50 -0.25 -19.66
Spot Palladium 624.36 -7.11 -1.13 -21.91
COMEX GOLD FEB2 1614.60 1.00 +0.06 13.59 15315
COMEX SILVER MAR2 29.34 0.09 +0.31 -5.17 1524
Euro/Dollar 1.3073
Dollar/Yen 78.04
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
