Bargain hunting, technicals lift gold from 5-week lows

 New York (Mar 25)  Gold edged up on Tuesday as a combination of bargain hunting, technical buying and lingering geopolitical tensions helped bullion to rebound from its previous session's two-percent drop.
  The yellow metal initially fell to a five-week low after data showed U.S. consumer confidence surged to a six-year high
in March and house prices increased solidly in January in signs of economic strength.
    In the previous session, a weaker dollar against other major
currencies failed to boost gold buying. Gold largely ignored a
flat U.S. dollar index on Tuesday.
    Analyst said that technical buying after a bullish "golden
cross" chart pattern provided underpinnings for gold.

    "Gold's long-term averages are still pointing to an upward
trend. A lack of follow through in the currency market is
reflective of what's going on in the metals market," said Bill
Wosnack, COMEX gold option floor trader at Atlantic Floor Group.
    Spot gold rose 0.2 percent to $1,311.26 an ounce by
1:57 p.m. EDT (1757 GMT), having earlier hit $1,305.59.
    U.S. COMEX gold futures for April delivery settled up
20 cents at $1,311.40 an ounce, with trading volume about 10
percent above its 30-day average, preliminary Reuters data
showed.
    Gold's gains were limited after Philadelphia Federal Reserve
Bank President Charles Plosser said he believes the Fed should
aim to raise short-term rates to 3 percent by the end of 2015
and 4 percent by the end of 2016.
    "Plosser's comments triggered that selloff in gold that took
us down to $1,306 and then we had some dovish statement from the
ECB, which took some heat off the metal," Saxo Bank senior
manager Ole Hansen said.
    The European Central Bank could buy loans and other assets
from banks to help support the euro zone economy, Germany's
Bundesbank has said, marking a radical softening of its stance
on the contested policy.
    Investors were also watching the Ukraine crisis. Russia and
the West drew a tentative line under the Ukraine crisis on
Tuesday after U.S. President Barack Obama and his allies agreed
to hold off on more damaging economic sanctions unless Moscow
goes beyond the seizure of Crimea.
    As a gauge of investor interest, holdings of SPDR Gold Trust
, the world's largest gold-backed exchange-traded fund,
rose to their highest since December at 821.47 tonnes on Monday.

    In the physical market, Hong Kong's net gold exports to
China jumped 25 percent in February after a drop in the previous
month, data showed, but demand in March could be curbed by a
weaker yuan and the discounted prices on the mainland, dealers
said.
    Among other precious metals, silver rose 0.1 percent
to $19.91 an ounce and platinum fell 0.5 percent to
$1,415.50 an ounce.
    Palladium also slipped 0.7 percent to $786 an ounce,
having touched its highest since August 2011 at $799.50 in the
previous session on worries of supply disruptions from top
producers Russia and South Africa.

Source:  Reuters