>Asia spot gold up; thin trade, China buying

Sydney - Spot gold rose in Asia Monday in holiday-thinned trade, benefiting from some Chinese buying, but traders said low volumes likely exaggerated the price move.

Spot gold traded to an intraday high of $894.60 a troy ounce, up $8.80 on the New York close, before falling back to trade at $892.70/oz, up $6.90.

Japan's markets are closed for the Golden Week holidays until Wednesday, and the U.K. will be closed for a bank holiday Monday.

While gold was up Monday, bullion is likely to struggle against returning optimism in equity markets, and markets reacting strongly to economic data offering support for the much-talked about green shoots of recovery.

While equity markets are moving up, gold is going to struggle, said Darren Heathcote, head of trading at Investec.

However, the downside momentum should be tempered by physical buying ahead of the upcoming Indian wedding season, he added.

India's gold imports this year have ground to a near-halt due to high prices, and the weak rupee has made dollar-denominated gold all the more expensive.

However, there are signs of a turnaround from the world's largest consumer of gold.

Suresh Hundia, president of the Bombay Bullion Association, said Monday India imported around 30 metric tons of gold in April, compared with 24 tons in April 2008.

Looking ahead, the U.S. bank stress tests will now be announced May 7 instead of later Monday, but market attention has dissipated.

"It was much of a 'buy the rumor, sell the fact' kind of story. Concern really has waned," said Heathcote.

U.S. regulators have asked 19 U.S. financial institutions to provide details about their ability to withstand a prolonged economic downturn, with some banks potentially required to raise more capital.

At 0643 GMT, spot silver was up 14 cents on the New York close at $12.64/oz. Platinum was unchanged at $1,089.50/oz and palladium was down $4.00 at $211.00/oz.

Source: COMMODITIESCONTROL