RTRS:PRECIOUS-Gold steady, awaits cues on Europe plan
* Investors await direction from Europe's move
* Spot gold neutral - technicals
* Coming up: U.S. Sept CPI; 1230 GMT
(Adds detail, comment; updates prices)
By Rujun Shen
SINGAPORE, Oct 19 (Reuters) - Gold prices held steady on
Wednesday, shrugging off the downgrade of Spain's sovereign
credit rating, as investors wait for clarity on Europe's plans
to tackle the debt crisis at this weekend's European Union
summit.
Moody's cut Spain's sovereign ratings by two notches, citing
high levels of debt in the banking system and corporate sector,
and also cast doubt on France's triple-A rating earlier this
week.
France and Germany were reported to have reached an
agreement to boost a euro zone financial rescue fund to two
trillion euros ($2.76 trillion), as European leaders have been
pressured to come up with a definitive solution to the debt
crisis at the meeting this weekend.
"Gold has nowhere to go unless there is clarity on what
Europe wants to do," said Ronald Leung, a physical dealer at Lee
Cheong Gold Dealers in Hong Kong.
Gold usually benefits from economic and political turmoil
given its safe-haven appeal, but has moved in tandem with risk
assets in recent weeks. Spot gold has dropped for five out of
the last seven trading sessions.
Leung and other dealers said the price dip in the previous
session to below $1,630 attracted a wave of physical buying, but
demand eased as prices rebound.
Spot gold was little changed at $1,657.89 an ounce by
0633 GMT, recovering from $1,626.34 hit in the previous session,
its lowest in nearly two weeks.
U.S. gold GCcv1 gained 0.4 percent to $1,659.90.
Technical analysis suggested that spot gold has turned
neutral as the sharp rise from Tuesday's trough of $1,626.34 has
violated a short-term downtrend, said Reuters market analyst
Wang Tao.
Spot gold has been trading in a range roughly between $1,600
and $1,700 this month. Open interest in U.S. gold futures and
options stood near its lowest level since late July, as
investment interest languished, data from the U.S. futures
regulator showed <0#3CFTC088691>.
"At the moment it's just a traders' market rather than an
investors' market," said a Singapore-based trader, "It goes 20
bucks one way and 20 bucks the other way, then we are unchanged.
It lacks a main driver."
The difficulty in funding and market turbulence caused by
the euro zone's debt crisis have forced investors to the
sidelines.
"Effectual interest rates have to be lower and the market
has to turn stable -- these two are needed to get gold to return
to the upward trending market that everyone loved so much," he
said.
The United States pushed through its toughest measures yet
to curtail speculation in commodity markets in a tight vote on
Tuesday, likely shifting the focus of a fierce four-year debate
from the regulators to the courts.
"It is likely to affect the amplitude of the swings in
prices, and drive business away from COMEX to other forums such
as OTC (over-the-counter), MCX (Multi Commodity Exchange), or
Hong Kong," said David Thurtell, a Citigroup analyst.
Precious metals prices 0633 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1657.89 -0.75 -0.05 16.80
Spot Silver 31.81 -0.22 -0.69 3.08
Spot Platinum 1540.49 12.74 +0.83 -12.84
Spot Palladium 622.97 5.11 +0.83 -22.08
TOCOM Gold 4096.00 -23.00 -0.56 9.84 64334
TOCOM Platinum 3829.00 26.00 +0.68 -18.46 15784
TOCOM Silver 77.70 0.80 +1.04 -4.07 775
TOCOM Palladium 1551.00 36.00 +2.38 -26.04 222
COMEX GOLD DEC1 1659.90 7.10 +0.43 16.78 15010
COMEX SILVER DEC1 31.86 0.03 +0.09 2.97 2959
Euro/Dollar 1.3821
Dollar/Yen 76.75
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
