Gold steady on stimulus hopes

Gold edged up on Monday, extending its winning streak into a seventh session as dimming prospects for global growth support expectations of more stimulus measures from central banks around the world.

Further monetary easing would likely boost inflation, driving investors to gold as it is seen as a good hedge against rising prices.

Data earlier on Monday showed Japan's economic growth slowed much more than expected in the second quarter, after a string of figures on Friday suggested that China's pro-growth measures have been insufficient.

"The sentiment (on gold) has gotten better in the past few days with investors focusing on central banks," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.

Schnider said gold could test its 200-day moving average near $1,650 around the US Federal Reserve symposium, slated to take place late this month in Jackson Hole, Wyoming, and expected to shed light on the central bank's attitude towards further stimulus.

Spot gold gained 0.2 percent to $1,622.08 an ounce by 0639 GMT, after posting a weekly rise of nearly 1 percent.

The U.S. gold futures contract for December delivery inched up 0.1 percent to $1,625.

Spot gold could rise to $1,632 an ounce during the day, Reuters market analyst Wang Tao said.

Hedge funds and money managers cut their net long position in US gold futures and options by 11 percent in the week to Aug 7, following a 35-percent surge in the previous week, data from the US Commodity Futures Trading Commission showed.

Asia's physical gold traders were also in a wait-and-see mode, waiting for prices to display a clear trend, dealers said.

Gold-Platinum Premium hits record high

Gold's premium to platinum rose to an all-time high above $230 an ounce, as platinum remained under pressure from gloomy economic prospects.

Gold has been at an average $194 discount to platinum since January, 1985.

Prices of spot platinum, mainly used to produce autocatalyst and jewellery, traded nearly flat at $1,393.80, after falling for six weeks in a row.

So long as the global economy does not show signs of improvement and platinum supply does not undergo dramatic cuts, platinum's suffering is likely to continue and the spread could widen further, analysts said.

In South Africa's troubled platinum sector, two security guards were hacked to death at a mine operated by the world's number three platinum producer Lonmin on Sunday in new violence between rival unions, company officials said.

Precious metals prices 0639 GMT

Metal Last Change Pct chg YTD pct chg Volume

Spot Gold 1622.08 2.64 +0.16 3.73

Spot Silver 28.01 -0.07 -0.25 1.16

Spot Platinum 1393.80 0.90 +0.06 0.06

Spot Palladium 577.90 0.20 +0.03 -11.43

COMEX GOLD DEC2 1625.00 2.20 +0.14 3.71 10750

COMEX SILVER SEP2 27.99 -0.08 -0.27 0.25 4148

Euro/Dollar 1.2278

Dollar/Yen 78.27

COMEX gold and silver contracts show the most active months

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