SINGAPORE, March 8 (Reuters) - Gold edged higher on
Thursday, extending gains into a second session, as fears about
a messy default for Greece eased after signs it may be able to
secure a crucial debt swap deal.	
    Gold has been recuperating from a selloff earlier in the
week, together with the euro and equities, after promising U.S.
jobs data and hopes that Greece will complete a crucial bond
swap deal.  	
    Spot gold edged up 0.2 percent to $1,688.70 an ounce
by 0720 GMT, standing above the 200-day moving average of around
$1,678. Gold gained 0.6 percent on Wednesday following a
2-percent slide in the previous session.	
    U.S. gold gained 0.3 percent to $1,689.50.	
    Expectations that central banks will continue to promote
growth by maintaining easy monetary policy also helped buoy
gold, even though the sterilised bond buying under consideration
by the U.S. Federal Reserve, as reported by the Wall Street
Journal, in itself might diminish gold's appeal as an inflation
hedge. 	
    "Central banks are expected to take up the role of the main
agent of stimulus, since distressed governments can't provide
any help on the fiscal front," said a Singapore-based trader.	
    "I still see a lot of long positioning out there."	
    Holdings in the gold-backed exchange-traded funds
 hit a record high, and gained 269,000 ounces
since last Wednesday, when gold prices collapsed 6 percent after
U.S. Federal Reserve chief Ben Bernanke disappointed investors
by not referring to any further monetary easing.	
    "That's a good sign, as investors appear to think it is a
good opportunity to get their hands on gold," said Dominic
Schnider, head of commodity research at UBS Wealth Management in
Singapore.	
    Physical demand also started to pick up after prices dipped
below $1,700, he added.	
    Spot gold could rebound towards $1,712 an ounce during the
day, said Reuters market analyst Wang Tao. 	
    	
    	
    Gold is traditionally viewed as a safe haven asset that
benefits during political and economic turmoil, but in the past
few months gold has largely moved in tandem with riskier assets
as the financial distress threatens liquidity in the market.	
    "When equities drop, the pool of available funds for
investing in commodities will shrink and gold will be in a bad
position to compete for investors cash because its sticker price
is much higher," said the trader.	
    "Gold is a very risky asset. People who look at it as a safe
haven are missing out one thing -- when gold becomes volatile,
it becomes much more volatile than currency or bond markets." 	
    On Friday, investors will await the key U.S. non-farm
payrolls data for cues on whether the Fed is likely to launch
any stimulus measures soon. 	
    China's January inflation data and industrial output data
due Friday will also be closely watched, as investors gauge the
pace of the world's second-largest economy. 	
    The world's two largest platinum producers said on Wednesday
they were not affected by a 1-day nationwide strike in South
Africa that has brought the country's gold mines to a halt and
also hit the coal sector. 	
    Spot platinum gained 0.9 percent to $1,639.99, off a
2-1/2-week low below $1,700 hit earlier this week.	
    	
      Precious metals prices 0720 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1688.70    3.94   +0.23      7.99
  Spot Silver        33.65    0.27   +0.81     21.52
  Spot Platinum    1639.99   14.50   +0.89     17.73
  Spot Palladium    682.80    2.00   +0.29      4.64
  COMEX GOLD APR2  1689.50    5.60   +0.33      7.83        13587
  COMEX SILVER MAY2  33.70    0.12   +0.34     20.72         2164
  Euro/Dollar       1.3172
  Dollar/Yen         81.29

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