PRECIOUS-Gold up on Japan stimulus, US stocks at 5-year high
* Gold faces technical resistance between $1,690-1,700
* Benefits by diversification as S&P overbought on charts
* Trader eye Comex gold options expiry on Jan. 28
(New throughout, changes byline, dateline, previously LONDON) NEW YORK, Jan 22 (Reuters) - Gold rose on Tuesday as the Bank of Japan's pledge to launch an economic stimulus effort and a five-year high in U.S. equities prompted nervous investors to buy gold. The metal climbed for a second day after the Bank of Japan said it would switch to an open-ended commitment to buying assets next year and double its inflation target to 2 percent in its most determined effort to boost its stagnant economy.
Bullion, however, has failed to close above strong technical resistance near its 50-day moving average at $1,690 an ounce as well as the $1,700 mark, even though it had been testing them in the last several sessions. "We've seen quite a bit of selling pressure that's coming at these levels. As S&P and stocks get into this overbought territory, the uncertainty is helping drive money back into precious metals as a safe haven," said Tom Power, senior commodities broker at brokerage RJ O'Brien. U.S. stocks mostly edged up on Tuesday after ending last week at five-year highs, but gains were limited with investors showing caution as the earnings season picks up speed. On charts, the 14-day relative strength index (RSI) rose to near an overbought 70, hovering near its highest since September 2012. Spot gold was up 0.3 percent at $1,693.97 an ounce by 12:47 p.m. EST (1747 GMT). Spot gold has not risen above $1,700 since Dec. 18. U.S. gold futures for February delivery were up $7.10 at $1,694.10 an ounce, with trading volume on track to finish in line with its 250-day average. Tuesday's turnover also included trading on Monday when the U.S. markets were shut due to the Martin Luther King Jr. holiday. Traders were monitoring February COMEX options ahead of their expiration on Jan. 28, following a strong rise in open interest recorded in call options at the $1,710 strike. (Graphic: http://link.reuters.com/gym45t) "Options traders are now trying to put in their positions and if the prices run up to that level, there will probably be quite a lot of stop-buying," Fastmarkets analyst James Moore said. Spot silver rose 0.5 percent to $32.15 an ounce.
INDIA HIKES MORE IMPORTS DUTIES The gold market has for now ignored news that India more than doubled the import duty on gold alloy on Tuesday. The move comes on the heels of a tariff rise for refined gold, as New Delhi tries to curb demand in the world's biggest bullion importer and rein in a record current account deficit.
A Reuters poll of 37 analysts showed gold could test record average highs of $1,775 and $1,780 in 2013 and 2014 respectively, but suggested its 12-year long bull run may be plateauing. Spot platinum was up 1.1 percent at $1,692.24 an ounce, while spot palladium climbed 1.5 percent at $725.72 an ounce. The platinum group metals have been underpinned by worries about widening deficits on the back of last week's news of output cuts in South Africa and hopes for an improvement in global demand. Analysts predicted an average palladium price of $745 an ounce for 2013, 16 percent above last year's average of $641 an ounce and an average $1,700 an ounce for platinum, up 10 percent from 2012's average $1,546. Prices at 12:47 p.m. EST (1747 GMT)
LAST NET PCT YTD CHG CHG CHG US gold 1694.10 7.10 0.4% 1.1% US silver 32.185 0.253 0.8% 6.5% US platinum 1697.70 23.70 1.4% 10.3% US palladium 728.25 5.50 0.8% 3.5%Gold 1693.97 4.42 0.3% 1.2% Silver 32.15 0.15 0.5% 6.0% Platinum 1692.24 18.75 1.1% 10.1% Palladium 725.72 10.72 1.5% 3.4%Gold Fix 1690.50 -2.00 -0.1% 1.6% Silver Fix 31.94 4.00 0.1% 6.6% Platinum Fix 1687.00 1.00 0.1% 10.8% Palladium Fix 717.00 0.00 0.0% 2.6%
(Additional reporting by Jan Harvey and Clara Denina in London; Editing by Bob Burgdorfer)