#NEWS : PRECIOUS-Gold rises to near 3-wk high, bullion in euro at record

Wed Dec 1, 2010 12:52am EST

 * Gold may gain to $1,403 -technicals[ID:nL3E6N101X]

 * Coming up: U.S.ISM Manufacturing PMI Nov; 1500 GMT

(Updates prices) 

 By Lewa Pardomuan 

 SINGAPORE, Dec 1 (Reuters) - Gold firmed to its highest in
nearly three weeks on Wednesday as growing fears about
Portugal's debt pummeled the euro, sending bullion priced in
the single currency to a record high. 

 Standard & Poor's threatened to cut the credit ratings of
Portugal, citing uncertainties stemming from the risk of the
country having to seek international financial aid -- just
after Ireland secured an 85 billion euro bailout package from
the European Union. [ID:nN30292510] 

  Spot gold rose as high as $1,392.75 an ounce, its
highest since Nov 12, and was at $1,392.05 an ounce by 0535
GMT, up $7.11. Bullion was still below a lifetime high around
$1,424 struck in early November. 

 BNP Paribas hiked its 2011 gold price forecast by 20
percent, saying a number of factors -- uncertainty on the role
of the dollar within the international monetary system,
concerns on the stability of peripheral euro zone countries
and growing inflationary pressures in Asia -- supported an
upward trend.  

 "Consequently, we have raised our 2011 gold price forecast
to $1,500 an ounce from $1,245 an ounce previously. If we see
the gold rally extending in 2012, it will however take place
at a more moderate pace. We expect gold to average around
1,600 an ounce in 2012," BNP Paribas said in a report. 

 Gold priced in euro rallied to a record at
1,070.11 euros an ounce. U.S. gold February futures
rose $7.4 to $1,393.5 an ounce.  

 Spot gold is expected  to extend its gain to $1,403
per ounce, as per its wave  pattern and a Fibonacci projection
analysis, according to Wang Tao, a Reuters market analyst for
commodities  and energy technicals. 

 For a 24-hour gold technical outlook: 

 here 

 The euro struggled across the board on Wednesday, stuck
near 11-week lows against the dollar as the market waited to
see what European policymakers would do next to try to contain
worries about euro zone debt. 

 There are growing worries that other debt-ridden euro zone
countries such as Portugal and Spain will also need aid. The
Portuguese prime minister said the country was not facing any
pressure to ask for a bailout and did not need any such help.
[ID:nLIS002517]  

  "We've seen buying on dips on the physical side but
towards year-end, I guess people will also book profits. I
think people are still watching the developments in Europe and
also Korea," said a dealer in Hong Kong. 

  "Is Europe going to print more money to rescue the
economy? Is China going to increase the interest rates? Let's
see how it's going to impact the market," he added.  

  Some dealers said there was a bit of safe-haven buying
related to the conflict in the Korean peninsula, while others
believed investors paid more attention to the debt crisis in
Europe and worries about interest rate hike in China.  

 China's factories revved up  production in November, but a
big jump in input prices pointed to more inflationary pressure
in the pipeline and a need for more monetary
tightening.[ID:nTOE6B001C] 

 South Korea plans more military drills after U.S. warships
leave on Wednesday, Yonhap  news agency said, a move likely to
add to tension on the divided peninsula after last week's
attack by the North. [ID:nTOE6B0006]  

 In equities, Japan's Nikkei share average was flat on
Wednesday, after falling nearly 2 percent the previous day
when China stocks tumbled on a liquidity squeeze. U.S. shares
fell in a choppy session on Tuesday on Portugal fears. 
 
 Precious metals prices at 0535 GMT                                                
 Metal             Last    Change  Pct chg  YTD pct chg  Turnover                  
 Spot Gold        1392.05    7.11   +0.51     27.05                                
 Spot Silver        28.30    0.25   +0.89     68.15                                
 Spot Platinum    1670.74   14.74   +0.89     13.89                                
 Spot Palladium    701.47    5.47   +0.79     72.99                                
 TOCOM Gold       3741.00   41.00   +1.11     14.79        66949                   
 TOCOM Platinum   4529.00   41.00   +0.91      3.38        12012                   
 TOCOM Silver       76.10    2.80   +3.82     47.20         3034                   
 TOCOM Palladium  1900.00   28.00   +1.50     63.09          719                   
 Euro/Dollar       1.3021                                                          
 Dollar/Yen         83.39                                                           

                                                                                 
 TOCOM prices in yen per gram. Spot prices in $ per ounce.                         
 
(Editing by Himani Sarkar) 

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