SINGAPORE, Feb 29 (Reuters) - Gold edged higher on
Wednesday, after rallying 1 percent in the previous session,
supported by expectations for more cheap loans to be offered by
the European Central Bank later in the day.	
    Cash gold was on course for a monthly gain of 2.6 percent in
February ahead of the expected injection of nearly half a
trillion euros by the ECB, seen as designed to buy more time for
European politicians to resolve the region's debt woes.
  	
    "There is so much cheap money around," said Ronald Leung, a
dealer at Lee Cheong Gold Dealers in Hong Kong. 	
    "The momentum is still there and may push gold to
$1,815-$1,820, with expectations that central banks will further
relax their policies."	
    Easy monetary policy raises the inflation outlook and
benefits gold, traditionally seen as a good inflation hedge. The
access to sufficient cheap credit also keeps down the
opportunity cost of carrying non-yielding bullion.	
    Spot gold inched up 0.1 percent to $1,786.06 an ounce
by 0315 GMT, after hitting $1,789.40 on Tuesday, its highest
level since mid-November.	
    U.S. gold was little changed at $1,787.80.	
    The euro held its ground and the greenback edged lower
against a basket of currencies, giving support to dollar-priced
commodities as they become more attractive to buyers holding
other currencies. 	
    Technical analysis suggested that spot gold still aims at
$1,797 during the day, Reuters market analyst Wang Tao said.
 	
    
    	
    	
    Spot silver barely moved at $36.90 an ounce, after
surging 4 percent and reaching a five-month high of $37.21 in
the previous session. 	
    The gold-silver ratio dropped to its lowest level in five
months, after silver rose more than 11 percent so far this month
and a whopping 33 percent this year, outperforming the other
precious metals.	
    "Silver looks more positive than gold for the time being,
but it's not related to rising physical demand," said a Hong
Kong-based dealer, adding that there was a slight pickup in
scrap selling and investor buying as prices rose.	
    On the chart, spot silver could rise to $43.97 over the next
four weeks, indicated as the 76.4 percent Fibonacci retracement
level on the fall from a record high near $50 to a low above $26
hit in September, said Reuters' Wang.	
    The relative strength index stood above 77, its highest
level since last April, indicating the market has become
overbought.	
    Spot platinum rose 0.4 percent to $1,721.24.	
    Impala Platinum, the world's second-largest
platinum producer, said on Tuesday the costs of an illegal
strike at its key Rustenburg operation in South Africa have
reached 100,000 ounces and a loss of income of 2 billion rand
($263.66 million).  	
    	
      Precious metals prices 0315 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1786.06    2.07   +0.12     14.21
  Spot Silver        36.90   -0.01   -0.03     33.26
  Spot Platinum    1721.24    7.00   +0.41     23.56
  Spot Palladium    720.97    1.75   +0.24     10.49
  COMEX GOLD APR2  1787.80   -0.60   -0.03     14.11         5832
  COMEX SILVER MAR2  36.94   -0.20   -0.55     32.31          109
  Euro/Dollar       1.3474
  Dollar/Yen         80.49

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