SINGAPORE (Reuters) - Gold traded little changed on Friday but was headed for the second weekly rise in three, supported by concerns over U.S. fiscal problems and a weaker dollar.
Gold has been stuck in a narrow range around $1,730 an ounce most of this week as investors wait to see if U.S. lawmakers will be able to avert a looming "fiscal cliff" - $600 billion in tax hikes and spending cuts scheduled to kick in early next year - that threatens to push the economy into another recession.
They are also waiting for the outcome of a meeting between Greece and its international lenders next Monday, with expectations of a deal on a bailout for Athens.
"We are stuck between $1,715 and $1,740 area for now, but speculators are still bullish on gold, as uncertainties about the 'fiscal cliff' hang around and they believe that central banks around the world will stay loose on monetary policy," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
Easing monetary policy boosts gold's inflation-hedge appeal. The U.S. Federal Reserve's stimulus measures have been a major driver behind gold's 11-percent rise so far this year.
The dollar index has dropped 0.7 percent so far this week, on course for its biggest weekly decline since early October. A weaker greenback makes dollar-priced commodities more affordable for buyers holding other currencies.
Spot gold was flat at $1,729.14 an ounce by 0323 GMT, headed for a weekly gain of 1 percent.
U.S. gold inched up $1.20 to $1,729.40.
Technical analysis suggested that spot gold looks weak below resistance at $1,734 and may retrace to $1,720 an ounce, said Reuters market analyst Wang Tao.
PHYSICAL FLOW SLOW IN ASIA
Physical market in Hong Kong and Singapore was quiet, as the rangebound prices put off interest from both buyers and scrap sellers, dealers said.
"Physical demand is very slow, especially from the jewellery sector, for this time of the year," said Dick Poon, general manager of Heraeus Metals Hong Kong Ltd.
The labour unrest in South Africa remains a concern to the market. Two miners were killed in clashes between rival unions at a mine run by Harmony Gold, in a fresh flare-up of labour violence in Africa's largest economy days after a wave of wildcat strikes ended, police said.
Source: http://news.yahoo.com/gold-headed-weekly-gain-us-fiscal-worry-supports-060546041--finance.html
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