PRECIOUS-Gold headed for biggest weekly loss since early Nov

Reuters Middle East

* Spot palladium headed for more than 13-pct monthly rise

* Spot gold technical signals mixed - technicals

* Coming up: U.S. CFTC commitment of traders; 1930 GMT

(Adds details, comments; updates prices)

By Rujun Shen

SINGAPORE, Nov 30 (Reuters) - Gold was trading in a tight $4

range above $1,720 an ounce on Friday, but prices were on track

for their biggest weekly drop since the start of the month with

an uncertainty about crucial U.S. talks to avert a fiscal crisis

continuing to hit sentiment.

While gold has recovered from a 1-1/2-week low of $1,705.64

an ounce hit on Wednesday, it has been unable to break a strong

resistance at $1,730 an ounce in a market roiled by conflicting

comments from Washington about the U.S. budget negotiations.

Top Republican lawmaker John Boehner said on Thursday that

the talks had made little progress, after expressing optimism

about reaching a deal with the White House just a day earlier.

If the parties fail to reach an agreement, $600 billion in

tax hikes and spending cuts - dubbed as the "fiscal cliff" -

will automatically kick off in early January, threatening to

push the world's top economy into recession.

"Gold is back in its old $1,700-$1,730 range," said Chen

Min, an analyst at Jinrui Futures in the southern Chinese city

of Shenzhen, referring to a range in which gold had traded

earlier this month.

"On the macro side, the market sees very little direction,

while the 'fiscal cliff' talk poses much uncertainty and risk."

Spot gold traded little changed at $1,726.29 an ounce

by 0258 GMT, headed for a 1.6 percent weekly drop but a 0.4

percent monthly gain.

U.S. gold was nearly flat at $1,726.50.

Technical analysis suggested signals were mixed for spot

gold, as it was not clear that a rebound from Wednesday's low

had been completed, Reuters market analyst Wang Tao said.


Spot palladium inched up 0.1 percent to $682.47, on

course for a fifth week of rise and a monthly gain of more than

13 percent, its strongest since December, 2010.

Concerns about supply and technical buying helped send

palladium to a 2-1/2-month high of $689 on Thursday.

"It might be a trade of choice for 2013," said a Hong

Kong-based trader. "People don't want to miss it and are

pressured to jump in now."

Norilsk Nickel, the world's largest producer of palladium

and nickel, expects the palladium market to remain in a deficit

in the next several years largely due to a near depletion of

Russian state supplies.

In other precious metals, spot silver inched down 0.2

percent to $34.14, on course for a monthly gain of 6 percent.

Silver prices could revisit record highs next year, but any

gains will depend heavily on a rally in gold fuelling investment

as silver struggles to overcome a soft outlook for supply and

demand, metals consultancy GFMS said on Thursday.

Spot platinum was headed for a rise of more than 3

percent in November.

In other news, Shanghai Gold Exchange said it will start a

trial run of over-the-counter gold trading on the China Foreign

Exchange Trading System on Dec. 3, allowing banks to trade

amongst themselves and in large volumes.

Precious metals prices 0258 GMT

Metal Last Change Pct chg YTD pct chg Volume

Spot Gold 1726.29 1.50 +0.09 10.39

Spot Silver 34.14 -0.07 -0.20 23.29

Spot Platinum 1609.74 1.25 +0.08 15.56

Spot Palladium 682.47 0.75 +0.11 4.59

COMEX GOLD DEC2 1726.50 -0.70 -0.04 10.19 172

COMEX SILVER DEC2 34.18 -0.17 -0.50 22.43 91

Euro/Dollar 1.2997

Dollar/Yen 82.42

COMEX gold and silver contracts show the most active months

(Editing by Himani Sarkar)

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