Gold eases on US data, stronger dollar
Singapore, August 1, 2013
Gold reversed early gains on Thursday as the dollar crept off six-week lows on brighter US economic data and investors fretted about a pull-back in monetary stimulus despite dovish comments from the Federal Reserve.
The Fed gave no indication after a two-day policy meeting of an imminent end to its bond buying programme, which has supported the metal's safe haven appeal, but traders said policy makers would closely watch upcoming data.
"I think people might be hard pressed to come up with really a compelling reason to put new positions on gold based on that one statement," said one Hong Kong-based precious metals trader.
"If we see a very strong recovery in the employment situation, that will unsettle the markets," he added.
US nonfarm payrolls data is due for release on Friday, and will follow Wednesday's gross domestic product and jobs data that painted a brighter picture of economic growth.
Spot gold fell 0.2 per cent to $1,320.54 an ounce by 0354 GMT, after rising more than 7 per cent in July to post its strongest month since January 2012. Silver fell 1 per cent, while platinum and palladium were higher.
US gold gained as much as 1 per cent.
The dollar index gained 0.5 per cent, though it was still near six-week lows.
Physical demand for bullion also remained quiet. Shanghai gold futures turned negative after gaining at the open, indicating soft buying in China - the world's second biggest bullion consumer.
In top buyer India, gold imports have come to a halt due to uncertainty in import policy, keeping premiums high at around $45 an ounce over London prices.
The Indian central bank has still not issued any clarification to importing agencies regarding a rule that ties imports to exports, a Mumbai-based dealer said.
Logistics firms have not cleared a single shipment since the rule was announced on July 22, the dealer said. - Reuters