PRECIOUS-Gold Regains Ground Amid Concerns Over Central Bank Tightening, Reports Reuters

Gold Prices Rise Amid Market Uncertainty

SINGAPORE, March 30 (Reuters) – Gold prices experienced a modest increase on Wednesday amid a rise in equities. However, investor confidence remained shaky following discussions about potential tightening of monetary policy by central banks, which could reduce gold’s attractiveness as an inflation hedge.

Key Highlights

• Spot gold gained $2.35, reaching $1,418.30 per ounce by 0027 GMT. This is significantly lower than its recent peak of approximately $1,447 reached the previous week. On Tuesday, the price fell by 0.1% as fears regarding central bank policy shifts prompted selling.

• U.S. gold futures for April rose by $2.7 to $1,418.9 per ounce.

• St. Louis Federal Reserve President James Bullard suggested that the U.S. central bank should initiate a reduction of its monetary easing strategy, proposing a cut of $100 billion from its $600 billion bond-buying program.

Market Overview

• The Nikkei stock average in Japan edged up on Wednesday, recovering from previous losses, as rising U.S. bond yields bolstered the dollar against the yen. Wall Street also saw slight gains, albeit on low trading volume.

• Commodity prices showed mixed results on Tuesday. Investors braced for the conclusion of a volatile quarter; oil prices increased due to ongoing unrest in Libya, gold prices fell amid tightening monetary policy discussions, and copper prices were supported by moderate Wall Street gains.

Upcoming Data Releases (GMT)

• 0900: Eurozone Business Climate for March 2011
• 0900: Eurozone Economic Sentiment for March 2011
• 2301: South Korea Industrial Output Year-on-Year for February 2011
• 2315: Japan Manufacturing PMI for March 2011

Precious Metals Prices (as of 0027 GMT)

Note: TOCOM prices are in yen per gram, while spot prices are quoted in dollars per ounce.

(Reporting by Lewa Pardomuan; Editing by Clarence Fernandez)