Gold price hovers near 4-1/2-month low
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Gold price hovers near 4-1/2-month low

Last Updated: Thursday, November 28, 2013, 12:54
 
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Gold price hovers near 4-1/2-month low
Singapore: Gold steadied on Thursday after a two-day decline but it was not too far from a 4-1/2-month low as strong weekly jobs data in the United States stirred fears of an early winding-down of the Federal Reserve's economic stimulus.

Investors fear strong economic data could prompt the Fed to cut back on its USD 85 billion in monthly bond purchases, which have added to gold's appeal as a hedge against inflation.

The number of Americans filing new claims for unemployment aid unexpectedly fell last week, data from the Labor Department showed on Wednesday.

"The gold markets have become more prone to dropping on good economic data than rising on poor economic data," said Phillip Futures analyst Joyce Liu.

"In view of the apparent improvement in the economy, investors are slowly pulling funds out of gold for better avenues of investment."

Spot gold rose 0.2 percent to USD 1,239.61 an ounce by 0319 GMT, after dropping 0.5 percent on Wednesday. It fell to USD 1,227.34 on Monday, its lowest since early July.

Platinum inched higher after losing more than 1 percent in each of the previous two sessions. Silver and palladium also ticked up.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 5.70 tonnes to 843.21 tonnes on Wednesday to their lowest since early 2009.

The fund has seen outflows of more than 450 tonnes this year as investors put more money into equities as stock markets rallied. The outflows from ETFs have been a big factor in gold prices dropping more than 25 percent in 2013.

CHINESE BUYING STRONG

China, which has been a big support for gold prices this year, saw a pick-up in demand this week due to lower prices.

Traded volumes of 99.99 percent purity gold on the Shanghai Gold Exchange hit 17.7 tonnes on Wednesday, their highest since Oct. 8, according to Reuters calculations.

China's net gold imports from Hong Kong climbed to their second highest on record in October as the country bought more than 100 tonnes of gold for a sixth straight month to meet unprecedented demand. It is expected to overtake India as the biggest consumer of the metal.



Reuters

First Published: Thursday, November 28, 2013, 12:42


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