Gold rises with premiums to the highest in 2-years (Reuters) (11-01-2011)

SINGAPORE – Gold rose on Tuesday though worries on euro zone debt crisis remain, while investors and jewellers pushed up premiums for gold bars to their highest in two years.

Bullion's drop to its lowest in more than a month last week also helped lift premiums for gold bars, which were offered at a premium of $3 to the spot London prices in Hong Kong, matching a similar level seen in late 2008.

Spot gold rose $1.35 an ounce to $1,375.80 an ounce by 0640 GMT. Gold was well below a historical high of around $1,430 struck in December.     

Gold is expected to rebound into a range of $1,388-$1,392 per ounce as an upward wave "c" is advancing, the same time when U.S. gold futures for February added $2.1 an ounce to $1,376.2 an ounce.         

The physical sector in Singapore was steady after seeing heavy buying from jewellers in Thailand on Monday, which could be related to inflation fears there. China's Lion Fund  Management, which last month launched the first gold fund in the world's biggest producer of the metal, has met its goal of raising $500 million for the fund, according to the company.    

The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings rose to 1,272.682 tonnes by Jan. 10 from 1,271.164 tonnes on Jan. 7.

Source: Reuters