PRECIOUS-Gold rises to 1-month high on options-related buying
* Technical support, falling U.S. dollar help lift gold
* Late-session rally in thin summer volume - analysts
* Short covering ahead of option expiry, first-notice day
* Coming up: U.S. new home sales report Wednesday
(Updates prices and adds trader comment) NEW YORK/LONDON, July 23 (Reuters) - Gold rose to a one-month high on Tuesday as speculators bought back bearish bets ahead of an option expiry later this week after the metal rallied further above a technical threshold at $1,300 an ounce breached in the previous session. After mostly directionless earlier trade, bullion staged a late-day rally in thin summer trading as a falling dollar prompted funds, fearing a reversal of a downward trend, to cover their short positions. "There are some options-related buying as traders cover short positions in the options market, which adds to buying in the underlying futures," said David Meger, director of metals trading at futures brokerage Vision Financial Markets. A sharp sell-off since mid-April has sparked growing interest in using gold options to profit from increased volatility. The open interest in U.S. Comex gold options rose to a record high of more than 1.8 million contracts, CME Group said on Tuesday. Spot gold was up 0.6 percent at $1,342.74 an ounce by 3:50 p.m. EDT (1950 GMT), after hitting a fresh one-month high of $1,346.11. Year to date, gold is still 20 percent lower after posting an annual gain in each of the past 12 consecutive years. U.S. gold futures for August delivery settled down $1.30 an ounce to $1,334.70, with trading volume around 5 percent above its 30-day average, preliminary Reuters data shows. Technical buying could help fuel gold's rally, analysts said. "A hold above the 50-day moving average of $1,331 an ounce on the spot market may have provided some support for bullion prices," said James Steel, HSBC's chief metal analyst. On Monday, gold ended above the key chart resistance for the first time since late January, Reuters data showed. Analysts said the metal was also underpinned by short covering as futures investors, anticipating the start of delivery period on August contracts, rolled positions from August to December. The delivery period begins July 31.
ETF OUTFLOWS, INDIA IMPORTS EYED Outflows from gold ETFs, which issue securities backed by physical stocks of bullion, have averaged 20 tonnes a week this year, Reuters data shows. Investors say they want to see outflows steady before buying back into gold. Consumption in the world's No. 1 gold buyer, India, is expected to be cut by moves on Monday by India's central bank to tighten gold imports, increasing the country's dependence on exports. Among other precious metals, silver was down 0.3 percent at $20.47 an ounce, having risen 5 percent on Monday. Spot platinum inched up 0.1 percent to $1,442 an ounce, while palladium 1 percent lower to $736.72 an ounce.
3:50 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold AUG 1334.70 -1.30 -0.1 1325.60 1346.40 146,990 US Silver SEP 20.254 -0.255 -1.2 20.080 20.595 34,339 US Plat OCT 1443.10 -4.90 -0.3 1423.20 1454.00 9,824 US Pall SEP 739.45 -11.00 -1.5 731.20 747.50 3,231 Gold 1342.74 7.70 0.6 1327.40 1346.11 Silver 20.470 -0.060 -0.3 20.140 20.600 Platinum 1442.00 1.50 0.1 1426.00 1450.50 Palladium 736.72 -7.28 -1.0 734.27 745.72 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 199,136 196,174 179,627 21.48 0.07 US Silver 38,650 62,368 56,491 30.66 2.26 US Platinum 9,856 14,962 13,070 24.86 -0.25 US Palladium 3,294 4,368 5,466
(Editing by Bob Burgdorfer and Grant McCool)