PRECIOUS-Gold steady after gains; France downgrade weighs

SINGAPORE, Nov 20 (Reuters) - Gold traded little changed on

Tuesday, retaining the more than 1-percent rise from the

previous session driven by Middle East tensions, but a stronger

dollar weighed on sentiment after Moody's downgraded France's

credit rating.

FUNDAMENTALS

* Spot gold was little changed at $1,731.26 an ounce

by 0101 GMT, after posting its biggest one-day gain in about two

weeks on Monday.

* U.S. gold edged down 0.2 percent to $1,731.80.

* Moody's stripped France of its prized triple-A badge on

Monday, cutting the sovereign credit rating on Europe's No. 2

economy by one notch to Aa1 from Aaa, citing an uncertain fiscal

outlook and deteriorating economy.

* U.S. home resales rose in October and a gauge of

homebuilder sentiment climbed to a six-year high in November,

signs of surprising vigour in the country's still-struggling

housing market.

* Greece approved laws on Monday to enforce budget targets

and ensure privatisation proceeds are used to pay off debt,

seeking to appease foreign lenders before a critical meeting of

euro zone finance ministers.

* The Bank of Japan is expected to stand its ground by

keeping monetary policy unchanged on Tuesday in the face of

calls from the country's likely next prime minister to pursue

"unlimited" easing.

* Australia's central bank said it was still open to

interest rate cuts but judged it appropriate to leave policy

unchanged in November due to a pick-up in inflation at home and

a slightly more positive global backdrop.

* The tension in the Middle East keeps safe-haven demand in

gold buoyed. Israel's leaders weighed the benefits and risks of

sending tanks and infantry into Gaza after six days of

Palestinian rocket fire and Israeli air strikes have killed over

100 people.

* Holdings of the gold-backed exchange-traded funds edged

down to 75.406 million ounces on Nov. 19, not far off the record

high of 75.421 million ounces hit last week.

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MARKET NEWS

* U.S. stocks bounced higher for a second consecutive

session on Monday as investors were encouraged by the early

atmosphere surrounding talks to tackle the nation's fiscal

crunch.

* U.S. crude oil futures eased on Tuesday as the U.S. dollar

firmed against the euro after Moody's downgraded France's

sovereign rating, but the fall was limited by festering tensions

in the Middle East.

* The euro eased from a near two-week high after Moody's

stripped France's top-notch rating, while the dollar firmed a

touch against a basket of currencies.

DATA/EVENTS

Bank of Japan announces outcome of policy meeting

Eurogroup meeting, Brussels

0700 Germany Producer prices Oct

1245 U.S. ICSC weekly chain store sales

1330 U.S. Building permits Oct

1330 U.S. Housing starts Oct

1715 U.S. Federal Reserve Chairman Bernanke speaks

PRICES

Precious metals prices 0101 GMT

Metal Last Change Pct chg YTD pct chg Volume

Spot Gold 1731.26 -0.19 -0.01 10.71

Spot Silver 33.12 0.02 +0.06 19.61

Spot Platinum 1575.99 5.19 +0.33 13.14

Spot Palladium 639.72 2.72 +0.43 -1.96

COMEX GOLD DEC2 1731.80 -2.60 -0.15 10.53 3233

COMEX SILVER DEC2 33.12 -0.07 -0.22 18.63 856

Euro/Dollar 1.2780

Dollar/Yen 81.28

COMEX gold and silver contracts show the most active months

(Reporting by Rujun Shen; Editing by Ed Davies)

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