Gold down on economic worry, volume light due to storm
NEW YORK (Reuters) - Gold edged lower on Monday on worries about the global economy, and trading was far below normal as a monster hurricane began battering the U.S. East Coast and exchanges were shut in New York.
CME Group Inc. (CME.O) closed the COMEX/NYMEX trading floor while keeping its Globex electronic platform running.
Last week, gold declined for the third straight week due to a string of lackluster U.S. economic data and uncertainty over the future of U.S. Federal Reserve stimulus. It was gold's first three-week decline in more than a year.
Hurricane Sandy, which forecasters said could be the largest to hit the mainland in U.S. history, led to the first weather-related shutdown of U.S. stock markets in 27 years. Wall Street will remain shut through Tuesday.
Bullion could stay rangebound in the near term due uncertainty about the outcome of the November 6 U.S. elections, with most polls showing a deadlock between President Barack Obama and Republican challenger Mitt Romney.
"Trading desks will be lightly staffed due to the massive storm...and the fact that the polls remain tight will likely discourage investors from taking a definitive view on the precious metals group for the next few days," Edward Meir, metals analyst at brokerage INTL FCStone.
Spot gold was down 0.2 percent at $1,708.06 an ounce by 1:49 p.m. EDT (1749 GMT).
U.S. gold futures for December delivery settled down $3.20 an ounce at $1,708.70, with trading volume at only one-third of its 30-day average, preliminary Reuters data showed.
Other than light trading volume, the gold market largely ignored Hurricane Sandy, which was expected to wreak havoc for 50 million people from the Mid-Atlantic to Canada in her path.
"Gold is a 'safe-haven' for economic and political events. Weather has virtually nothing to do with gold," said Bill O'Neill, partner at commodities investment firm LOGIC Advisors.
Analysts and traders said they expected gold to trade in a narrow range due to uncertainty ahead of Friday U.S. non-farm payrolls. The Fed has explicitly tied the extent of its latest buyback of mortgage bond-buybacks to the jobs market recovery.
The U.S. Department of Labor said on Monday it intended to release its jobs data on Friday which might now be delayed because of the massive storm.
Spot gold is heading for its biggest monthly loss since May this month, having hit an 11-month peak above $1,795 an ounce on October 5 based on optimism after the Fed's latest easing program.
US FISCAL CLIFF IN FOCUS
Investors are also awaiting the U.S. elections and the so-called "fiscal cliff", a series of automatic spending cuts and tax increases that will kick in if Congress fails to reach a deficit-reduction deal by the end of the year.
In physical markets, gold importers in India, the world's biggest buyer, are retreating after picking up bargains last week as prices recovered from a more than two-month low due to the falling rupee.
Among other precious metals, silver fell 1 percent to $31.73 an ounce, platinum was down 0.5 percent at $1,530.74 an ounce, and palladium edged down 0.8 percent at $587.72 an ounce.