PRECIOUS-Gold struggles to pierce range; dollar pressures
* Shanghai-spot price spread narrows
* Spot gold neutral in $1,564 and $1,589 an ounce - technicals
* Coming up: ECB, BOE rate decisions
(Writes through; updates prices) SINGAPORE, March 7 (Reuters) - Gold traded little changed on Thursday, unable to break above a key resistance at $1,585 an ounce, as investors wait for major central banks' decisions on monetary policy and a firmer dollar weighed on sentiment. Traders are eyeing the outcome of the European Central Bank and Bank of England policy meetings later in the day, after the Bank of Japan kept its policy on hold as expected.
The dollar index hovered near its highest level in 6-1/2 months after solid U.S. job data fulled hopes of a recovery in the U.S. labour market, while investors positioned themselves for further signs of improvement in a key employment report on Friday. "As risk appetite rises, investors have left gold in the cold recently," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen. Gold is likely to bounce in a range between $1,550 and $1,590 an ounce in the near future, Chen added. The yield on 10-year U.S. Treasuries traded near Wednesday's peak, its highest level in more than a week, as investors moved out of safe-haven assets to seek better returns.
Spot gold was little changed at $1,584.31 an ounce by 0640 GMT. U.S. gold gained 0.6 percent to $1,583.90. Technical analysis suggested spot gold looks neutral in a range of $1,564 and $1,589 an ounce, and only an escape could point to a future direction, said Reuters market analyst Wang Tao.
The spread between Shanghai and spot gold prices narrowed from about $20 an ounce over the past few days to below $15. Strong buying from Chinese banks in the overseas market had helped push up the premium in onshore prices. "There is metal on the way (to China) so more banks are selling the spread," said a Hong Kong-based trader. The popular gold forward contract on the Shanghai Gold Exchange dropped to a two-week low of 317.5 yuan a gram, or $1,587 an ounce, before paring losses to 319.1 yuan. In other news, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, was unchanged on March 6 at 1,244.855 tonnes, after dropping for an unprecedented eleven straight sessions. A halt in rapid outflows could help stabilise gold prices.
Precious metals prices 0640 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1584.31 1.00 +0.06 -5.39 Spot Silver 28.99 -0.02 -0.07 -4.26 Spot Platinum 1591.07 6.82 +0.43 3.65 Spot Palladium 742.69 -1.53 -0.21 7.33 COMEX GOLD APR3 1583.90 9.00 +0.57 -5.48 15995 COMEX SILVER MAY3 28.99 0.18 +0.63 -4.12 3544 Euro/Dollar 1.2994 Dollar/Yen 93.87
COMEX gold and silver contracts show the most active months
(Editing by Richard Pullin)