PRECIOUS-Gold eases, focus shifting to key economic events

Tue Jun 5, 2012 3:32pm EDT

Related Topics

* Gold inches lower on weak euro data, Spanish debt worries
    * Consolidation continues after data-inspired rally Friday
    * Investors consider gold's next move in tumultuous June
    * Coming up: U.S. productivity Wednesday

 (Adds details, new graphic link, updates market activity)	
    By Frank Tang	
    NEW YORK, June 5 (Reuters) - Gold prices edged lower in
light volume o n T uesday, as the market took a breather from last
week's rally and investors shifted their attention to a flurry
of key economic events in Europe and central bank meetings
scheduled later this month.	
    Bullion continued to consolidate last week's 3.5 percent
gain as business surveys showed that all of the euro zone's
major economies are now in decline. Investor
sentiment remains jittery as Spain said credit markets were
closing as G7 finance chiefs held emergency talks on the
currency bloc's worsening debt crisis. 	
    The metal surged 4.3 percent last Friday after a
disappointing U.S. jobs report fueled speculation of further
U.S. monetary easing. Investors now mull over gold's response to
a tumultuous June ahead of a key election in Greece which could
hasten its exit from the euro zone, and major central-bank
meetings later this month. 	
    "If we have conditions that could lead to additional duress
in the equities market and further easing, and gold doesn't
respond positively to that, then we are seeing a breakdown of
its fundamental use as a hedge in portfolios," said Mark
Luschini, chief investment strategist at Janney Montgomery
Scott, a broker-dealer with about $54 billion in assets.	
    Spot gold inched down 0.1 percent to $1,616.81 an
ounce by 2:36 p.m. EDT (1836 GMT).	
    U.S. COMEX gold futures for August delivery drifted
higher in thin trade to settle up $3 at $1,616.90. The
discrepancy between the direction sof spot and U.S. gold on
Tuesday was due to the COMEX futures' slightly lower close in
the previous session.  	
    Trading volume was set to be among one of this year's lows
at just over 90,000 lots versus its 30-day average at nearly
210,000 lots, preliminary Reuters data showed, as the British
market was shut for a second consecutive day due to the Queen's
Jubilee celebrations. 	
    On the options front, analysts said that some volatility
indicators and recent trading of SPDR Gold Trust, the
world's largest gold exchange-traded fund, suggested bullion
prices should rise.	
    "Long GLD call spreads have been the options trade of choice
over the last few trading sessions as investors looked to
implement a bullish bias with limited volatility exposure,"
Philip Saunders, equity derivative strategist at broker-dealer
Topeka Capital Markets said in a note.	
    	
    TECHNICAL OUTLOOK, CHINESE BUYING	
    On weekly charts, gold broke above its bear channel
connecting its 2012 highs following its recent rally, Barclays
Research strategists said in a note. And the area between $1,522
and $1,533 an ounce is providing strong technical support, they
said.	
    	
    	
    	
    Confidence in gold, which has been knocked by weak
consumption b y number one gold buyer India in recent months, was
underpinned by data on Monday that showed extremely elevated
imports of the metal into China. 	
    Among other precious metals, silver rose 0.9 percent
at $28.47 an ounce. Spot platinum was up 0.7 percent at
$1,432.99 an ounce, while spot palladium was up 1.4
percent at $616.60 an ounce.	
    	
 2:36 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1616.90   3.00   0.2  1612.50 1624.80   87,834
 US Silver JUL  28.405  0.398   1.4   28.080  28.510   33,073
 US Plat JUL   1440.50  13.20   0.9  1428.80 1448.80    4,345
 US Pall SEP    619.80   5.90   1.0   611.30  623.70    1,591
                                                               
 Gold          1616.81  -1.94  -0.1  1612.85 1623.30         
 Silver         28.470  0.250   0.9   28.140  28.540
 Platinum      1432.99  10.34   0.7  1433.00 1447.50
 Palladium      616.60   8.22   1.4   613.02  620.75
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold         90,776   209,628   195,733     25.14   -0.28
 US Silver       43,681    52,909    53,393     36.53    2.49
 US Platinum      4,716     7,717     7,987        18    0.00
 US Palladium     1,658     5,810     4,593                  
                                                               
 	
	
 (Additional reporting by Doris Frankel in Chicago and Jan
Harvey in London; Editing by Marguerita Choy and Leslie Gevirtz)
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