PRECIOUS-Gold gains on physical demand, but ETF outflows persist

SINGAPORE, May 29 (Reuters) - Gold edged higher on

Wednesday, supported by strong physical demand after prices fell

1 percent the previous day, but gains are likely to be limited

by persistent outflows from exchange-traded funds.

FUNDAMENTALS

* Spot gold rose 0.2 percent to $1,382.89 an ounce by

0029 GMT, after falling to $1,373.14 on Tuesday.

* U.S. gold rose 0.3 percent to $1,382.50.

* Wall Street rallied on Tuesday after data showed that U.S.

consumer confidence in May was the highest in more than 5 years,

while home prices accelerated in March by the most in nearly

seven years.

* Bank of America Merrill Lynch lowered its gold and silver

price forecasts for 2013, citing weak fundamentals and lack of

investment buying. The bank now expects gold prices to average

$1,478 an ounce in 2013, 12 percent below its prior forecast of

$1,680.

* South Africa may take unspecified "interventions" in the

gold and platinum sectors as part of a state plan to maintain

the viability of the industries, mines minister Susan Shabangu

said on Tuesday.

* The U.S. Mint is resuming sales of its small American

Eagle gold bullion coins, a further sign that a coin-buying

frenzy has started to fade after investors took advantage of

bargain prices following gold's historic two-day sell-off in

mid-April.

The U.S. Mint, one of the world's largest gold and silver

coin producers, had halted sales of its small gold bullion coins

last month as surging demand depleted its inventory.

* Holdings in SPDR Gold Trust, the world's largest

gold-backed exchange-traded fund, fell to 1012.25 tonnes on

Tuesday, their lowest since February 2009.

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MARKET NEWS

* Japan's Nikkei share average rose on Wednesday with

technical signs in its favour after last week's tumultuous trade

pulled the index down 10 percent from a 5-1/2-year high.

* The dollar, which rebounded against the euro and yen on

Tuesday, rose 0.2 percent on Wednesday.

DATA/EVENTS (GMT)

0755 Germany Unemployment rate

0800 Euro zone M3 money supply

0800 Italy Business confidence

1145 U.S. ICSC weekly chain store sales

1200 Germany Inflation

1255 U.S. Redbook weekly retail sales

2030 U.S. API weekly crude stocks

Precious metals prices 0029 GMT

Metal Last Change Pct chg YTD pct chg Volume

Spot Gold 1382.89 2.64 +0.19 -17.42

Spot Silver 22.35 0.12 +0.54 -26.19

Spot Platinum 1462.50 5.00 +0.34 -4.72

Spot Palladium 753.25 -1.75 -0.23 8.85

COMEX GOLD JUN3 1382.50 3.60 +0.26 -17.50 3421

COMEX SILVER JUL3 0.22 0.00 +0.55 -99.26 584

Euro/Dollar 1.2845

Dollar/Yen 102.35

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin)

Source: http://news.yahoo.com/precious-gold-gains-physical-demand-etf-outflows-persist-005752620.html

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