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PRECIOUS-Gold tops $1,675 on ECB comments; PGMs surge

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Published: Thursday, 10 Jan 2013 | 10:03 AM ET
By: Veronica Brown

* No hints on near-term euro area rate cut

* Gold-platinum ratio at tightest since April 2012

* Chinese exports data boost platinum to highest in a month

(Adds quotes, updates prices)

LONDON, Jan 10 (Reuters) - Gold's rally picked up the pace on Thursday as prices topped $1,675 an ounce, rising along with the euro after the European Central Bank gave no hints on near-term rate cuts.

Earlier in the day, bullion's rise was outpaced by gains in platinum and palladium after data pointed to an improved economic backdrop in China.

"It's (Chinese data) been helpful across all of the commodities. We've seen all of the precious metals push higher, and this might largely be a dollar effect," Credit Suisse analyst Tom Kendall said.

"This move has been helpful and opens things up for a run towards the next resistance level (for gold) at $1,703," he added.

Speaking after the euro area bank opted to leave benchmark rates on hold, ECB President Mario Draghi said all members of its Governing Council were in favour of keeping interest rates unchanged when they met on Thursday.

The euro topped $1.3150 - taking gold with it to a session high at $1,675.70. It was last traded at $1,674.43, up 1 percent on the day.

"We would take away from Draghi's comments that the bar to another rate cut is higher than seemed to be the case last month," Brown Brothers Harriman said in a note to clients.

"If improved financial conditions do not lead to improvement in the real economy, rate cut expectations may return, but this now seems like a Q2 potential, not Q1," the bank added.

Gold has been moving in a narrow range of about $25 this week, with the upside capped by hints that open-ended U.S. bond buying may be nearing its limit.

Central bank monetary stimulus was a key driver behind gold's 12th year of annual gains in 2012 as investors were drawn to bullion as a hedge against inflation.

Gold hit a more than four-month low after minutes from the U.S. Federal Reserve's last meeting showed officials were concerned about the side effects of its bond-buying programme.

WHITE HOT

Spot platinum hit its highest in a month, while palladium was on course for a third day of gains.

By 1435 GMT, platinum was up 1.3 percent at $1,612.50 per ounce, while palladium had surged 2.1 percent to $697.57.

With gold and platinum's recent moves in different directions, the differential between the two had narrowed to its tightest since April 2012.

China's export growth rebounded more strongly than expected in December from a three-month low, expanding at the fastest rate in seven months, data showed on Thursday. The outlook for 2013 remained cloudy, however, with U.S. and European demand for Chinese goods still subdued.

Signs of continuous improvement in U.S. auto sales have also given a brighter tone to platinum group metals, alongside supply issues created by labour unrest in South Africa's producing belt.

"The overall (Chinese) trade data is looking positive in terms of exports. For PGMs there's some positivity, surprisingly, on the auto sector," Citigroup analyst David Wilson said.

(Additonal reporting by Rujun Shen in Singapore; Editing by Jane Baird)

 Print
LONDON, Jan 10- Gold's rally picked up the pace on Thursday as prices topped $1,675 an ounce, rising along with the euro after the European Central Bank gave no hints on near-term rate cuts. We've seen all of the precious metals push higher, and this might largely be a dollar effect, " Credit Suisse analyst Tom Kendall said.

   
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