PRECIOUS-Gold rises, sluggish data suggests Fed stimulus may stay
* Gold rebounds from seven-month low hit on Thursday * Spot gold headed for second week of decline * Spot gold to consolidate in $1,554.49-$1,585 range -technicals * Coming Up: Germany Ifo business climate; 0900 GMT (Updates prices) By Rujun Shen SINGAPORE, Feb 22 (Reuters) - Gold firmed on Friday, extending gains from the previous session, as lacklustre U.S. data bolstered hopes the Federal Reserve's monetary stimulus would stay in place, though prices are heading for a second straight weekly drop. Thursday's data on employment, manufacturing and consumer prices pointed to a still tepid recovery in the U.S. economy and supported the argument for the Fed to keep its stimulus. That, combined with bargain hunting, especially from Asia, helped lift gold from a seven-month low of $1,554.49 an ounce hit after minutes from the Fed's latest policy meeting triggered worries the central bank might stop or slow its bond buying programme. Easy global monetary policy has helped gold rally in the past few years as investors, worried about currency debasement and inflation as a result of money printing by central banks, sought refuge in the precious metal. "There is a lot of appetite coming in the market to buy the dips," said a Hong Kong-based trader. "After the Fed, people seemed to have a little less conviction that we are going to see indefinite low dollar rates, which have attracted a lot of interest in commodities, especially precious metals. But the macro picture hasn't changed tremendously and the underlying demand is still strong." The premium for gold traded in the Shanghai market over global prices stood at nearly $20 an ounce, up from lower single-digit premiums at the end of 2012, indicating strong buying from China, the world's second-largest gold consumer, he added. Spot gold rose 0.6 percent to $1,585.19 an ounce by 0649 GMT, on course for a weekly decline of 1.5 percent, its second week in the red. U.S. gold inched up 0.4 percent to $1,585.30. Technical analysis suggested spot gold may consolidate in the range of $1,554.49 to $1,585 over the next few sessions, as indicated by its wave pattern and a Fibonacci retracement analysis. Some analysts were less sanguine, expecting gold to remain in a downtrend as the overall outlook on the U.S. economy remains positive. "The disappointing U.S. data did not change our view that the U.S. economy is recovering," said Chen Min, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen. "In addition, there is no inflationary pressure in the economy, which would depress interest in gold buying." Chen expected gold to drop to as low as $1,500 an ounce by mid-year. Investors continued to bail out of SPDR Gold Trust. The world's biggest gold-backed exchange-traded fund reported that holdings dropped 8.89 tonnes on Feb. 21 to 1,290.306 tonnes, the lowest in more than five months. In the previous session, holdings slumped more than 20 tonnes, its biggest one-day drop in 18 months. Precious metals prices 0649 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1585.19 9.53 +0.60 -5.34 Spot Silver 28.89 0.25 +0.87 -4.59 Spot Platinum 1623.24 12.50 +0.78 5.75 Spot Palladium 735.00 6.53 +0.90 6.21 COMEX GOLD APR3 1585.30 6.70 +0.42 -5.40 20142 COMEX SILVER MAR3 28.87 0.17 +0.58 -4.52 4026 Euro/Dollar 1.3214 Dollar/Yen 93.30 COMEX gold and silver contracts show the most active months (Editing by Clarence Fernandez)
- Man called Bitcoin's father denies ties, leads LA car chase
- Ukraine standoff intensifies, Russia says sanctions will 'boomerang' |
- Florida mayor fights backyard gun ranges in 'Gunshine State'
- Apple loses bid for U.S. ban on Samsung smartphone sales
- 'Everything is fine', Pistorius told guard after shooting girlfriend |