GOLD FUNDAMENTAL

Gold was trapped in a tight
range around $1,660 an ounce on Friday ahead of a meeting of
euro zone finance ministers that may boost the bloc's bailout
power, and sluggish physical demand weighed on sentiment. 
    Spot gold rallied to a two-week high near $1,700 earlier in
the week after U.S. Federal Reserve Chairman Ben Bernanke
defended the low interest rate policy and cautioned it was
premature to declare victory on economic recovery, triggering
hopes of further monetary easing. 
    But the momentum faded as fast as it started, and prices
dropped to a one-week low just below $1,645 in the previous
session before recovering to $1,661.06 an ounce by 0347 GMT. 
    Spot gold was on course for a quarterly rise of 6
percent, after a slide of 3.6 percent in the last quarter of
2011, but it was headed for a monthly loss of 2 percent, its
second straight month in the red. 
    U.S. gold gained half a percent to $1,660.30 an
ounce. 
    Gold has been stuck in range of roughly $1,630 to $1,700 in
recent weeks, as investors try to digest mixed signals from
policymakers. Sluggish physical demand has dampened the mood in
gold. 
    "We don't expect to see real physical demand until prices
drop below $1,600," said a Singapore-based dealer. 
    "The physical market has stopped playing an important
supportive role. There is so much physical material, yet we
don't see any good offtake, as people are worried that it's not
the right time to invest in gold now." 
    He said the cautious tone in the market might last until the
second quarter due to the uncertainty around global growth. 
    Market participants will wait for China's official
purchasing managers' index data on Sunday, to gauge the chance
of a further slowdown in the world's second-largest economy. 
    A cooling economy and easing inflation could take the shine
off gold, which has attracted explosive investor interest in the
past few years in China. 
    The World Gold Council expects the country to displace India
 as the world's biggest gold consumer this year.