Gold inches down as investors await central banks meeting | Reuters

Indonesia scrap sales surge as Eid al-Fitr ends

* Silver, platinum still overbought

* Spot gold may fall to $1,643/oz – technicals

* Coming up: U.S. consumer confidence, Aug; 1400 GMT

By Rujun Shen

SINGAPORE, Aug 28 (Reuters) – Gold edged lower on Tuesday

after rising to its highest in over four months in the previous

session, as caution prevailed ahead of a central bankers’

meeting this week.

Spot gold surged on Monday after U.S. Federal Reserve

Chairman Ben Bernanke, in a report to a congressional panel,

said the central bank sees room to further ease its monetary

policy, raising hopes for another round of quantitative easing,

or QE3.

Central bankers and finance ministers from around the world

are scheduled to meet at Jackson Hole, Wyoming on August 31 and

September 1, and investors expect speeches by Bernanke and

European Central Bank chief Mario Draghi to shed light on

possible measures to shore up their sluggish economies.

“If we get QE3, gold could rise to $1,680 or $1,700,” said

Peter Fung, head of dealing at Wing Fung Precious Metals in Hong

Kong. “But for now, it is still unclear what is going to happen,

though hopes for QE are keeping gold supported at the $1,650

level.”

Spot gold edged down 0.2 percent to $1,660.10 an

ounce by 0627 GMT, after rising to $1,676.45 on Monday, its

highest level since mid-April.

U.S. gold fell 0.8 percent to $1,662.70.

Technical analysis suggested spot gold may drop to $1,643

during the day, said Reuters market analyst Wang Tao.

Scrap selling in Asia’s physical gold market continued as

Indonesia returns from the Eid al-Fitr celebrations marking the

end of the fasting month and cashes out after gold surged more

than 3 percent last week and broke above a $100 range that it

had held since May.

“A lot of scrap is flooding the market,” said a

Singapore-based dealer. “Last week it was the Thais that sold

scrap and this week is the Indonesians.”

The euro eased against the dollar, extending losses for the

third day straight, putting pressure on bullion.

Spot platinum traded around $1,530 an ounce, off a

3-1/2-month high of $1,558.49 hit last week, despite the

festering labour strife in South Africa’s platinum mines.

The Relative Strength Index on spot platinum and silver

remained above 70, suggesting the underlying assets are

overbought.

Spot silver lost 0.2 percent to $30.62 an ounce,

easing from $31.26 hit on Monday, its highest level in nearly

four months.

“Technical signals still look good on silver after we broke

above the 200-day moving average,” said a Shanghai-based trader,

“But in the absence of improving industrial demand, the monetary

policy will decide where prices will go.”

The 200-day moving average stood at $30.30.

“If we are able to hold onto the 200-day moving average, the

chart will look very nice and attract more buying interest,” the

trader added.

Total holdings of silver-backed exchange-traded funds fell

0.6 percent to 501.198 million ounces by Aug. 27, but still

gained 1 percent so far this month.

Precious metals prices 0627 GMT

Metal Last Change Pct chg YTD pct chg Volume

Spot Gold 1660.10 -3.50 -0.21 6.16

Spot Silver 30.62 -0.07 -0.23 10.58

Spot Platinum 1528.99 -8.11 -0.53 9.76

Spot Palladium 641.10 -4.50 -0.70 -1.75

COMEX GOLD DEC2 1662.70 -12.90 -0.77 6.12 16616

COMEX SILVER SEP2 30.63 -0.42 -1.36 9.71 6888

Euro/Dollar 1.2484

Dollar/Yen 78.54

COMEX gold and silver contracts show the most active months

via PRECIOUS-Gold inches down as investors await central banks meeting | Reuters.

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