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PRECIOUS-Gold ticks down on dollar; debt worries support

Published 06/10/2011, 02:10 AM
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* Platinum group metals supported by demand outlook, supply risk

* Gold neutral between $1,530-$1,553 - technicals

* Coming up: ECB President Trichet speaks; 0650 GMT (Updates prices)

By Rujun Shen

SINGAPORE, June 10 (Reuters) - Spot gold ticked lower on Friday under the weight of a slightly higher dollar, but worries about the ongoing debt crisis in the euro zone are likely to keep sentiment in gold market underpinned.

Platinum group metals built on recent gains, supported by the outlook for demand recovery from the automobile industry after the Japan earthquake as well as a potential supply disruption in South Africa.

The European Central Bank on Thursday signalled a July rate hike as expected, but raised the stakes in its stand-off with governments over a new bailout for Greece by rejecting any form of debt restructure.

The euro struggled to retain its footing as fears on Greece's debt problems dominated, while the dollar edged higher against a basket of currencies .

the lack of an immediate solution for Greece's debt crisis is likely to keep gold sentiment underpinned, as investors seek a safe haven in bullion during times of economic and political uncertainty.

Investors are also waiting for cues from the U.S. Federal Reserve on whether it would employ further stimulus measures after the expiration of the $600 billion bond buying programme this month, after recent data showed signs of stalling growth.

Spot gold traded in a range of about $5, and was quoted at $1,541.39 by 0526 GMT, down 0.1 percent from the previous close. It was on course for a 0.4 percent gain from a week earlier.

U.S. gold was flat at $1,542.70.

"Gold is in a consolidation mode," said Hou Xinqiang, an analyst at Jinrui Futures in China.

"We're in the seasonally dull period and gold is facing some pressure on the chart."

Technical analysis suggested that gold was neutral within the range between $1,530 and $1,553, said Reuters market analyst Wang Tao.

STRONG PGM

Spot palladium gained 0.2 percent to $814.72, on course for a 4 percent rise from a week earlier, leading the precious metals complex in weekly performance.

Platinum was little changed at $1,837.74, headed for a 1.3 percent weekly gain.

Palladium had climbed about 14 percent from a month earlier, and platinum 4 percent, compared to a 3-percent gain in gold and 7 percent rise in silver.

The recovery of Japan's automobile industry has helped platinum group metals, especially palladium, used in autocatalysts, to stage the recent winning run.

Toyota Motors , the world's largest automaker, expected to resume full production globally in November and its Japanese output is expected to recover to 90 percent of levels seen before the March earthquake.

In addition, South Africa is in the midst of wage talks in mining and related industries, during which the union has demanded hefty wage increases.

"Potential supply disruption risks continue to lurk in the background given previous negotiations across the industry have rarely been free of industrial action," said Barclays Capital in a research note. Precious metals prices 0526 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1541.39 -2.21 -0.14 8.59 Spot Silver 37.47 -0.06 -0.16 21.42 Spot Platinum 1837.74 0.89 +0.05 3.97 Spot Palladium 814.72 1.64 +0.20 1.90 TOCOM Gold 3982.00 20.00 +0.50 6.78 42352 TOCOM Platinum 4781.00 55.00 +1.16 1.81 12016 TOCOM Silver 96.60 2.10 +2.22 19.26 1003 TOCOM Palladium 2109.00 35.00 +1.69 0.57 331 COMEX GOLD AUG1 1542.70 0.00 +0.00 8.53 6020 COMEX SILVER JUL1 37.49 0.07 +0.18 21.17 2571 Euro/Dollar 1.4495 Dollar/Yen 80.14 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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