PRECIOUS-Gold bounces from 2-week low as stimulus seen continuing

Mon Mar 11, 2013 2:44am EDT

* Fed's stimulus seen to run through 2013 despite upbeat
jobs data
    * Spot gold neutral in $1,564.44-$1,586.90/oz -technicals
    * Coming Up: France industrial output; 0745 GMT

 (Updates prices)
    By Rujun Shen
    SINGAPORE, March 11 (Reuters) - Gold edged up on Monday,
pulling off a two-week low hit in the previous session on
better-than-expected U.S. jobs data, as the Federal Reserve is
expected to keep propping up the economy with monetary stimulus
through 2013, giving support to the metal.
    U.S. employers added a greater-than-expected 236,000 workers
to their payrolls in February and the jobless rate fell to a
four-year low, but Wall Street expects the Fed to continue its
bond buying programme.  
    The Fed's loose monetary policy has helped push gold to
record highs in recent years, as investors have sought a hedge
against a rising inflation outlook due to cash printing by the
central bank.
    But signs of recovery have emerged, fuelling speculation the
Fed would curtail its monetary stimulus sooner rather than
later, sapping interest in gold.
    "Gold prices have built in the view that the U.S. recovery
is on a good footing and by the end of the year we should see
the Fed exiting the stimulus, which should be bearish for gold,"
said Jeremy Friesen, commodity strategist at Societe Generale in
Hong Kong.
    A short-term bounce in gold is likely, as concerns about the
strength of the U.S. recovery and expectations of aggressive
monetary easing from the Bank of Japan next month might spur
buying, he added.
    Spot gold edged up 0.3 percent to $1,582.11 an ounce
by 0634 GMT, recovering from a two-week low of $1,560.80 in the
previous session.
    U.S. gold was also up 0.3 percent, at $1,581.30.
    Technical analysis suggested spot gold looks neutral in the
range of $1,564.44 to $1,585.90 an ounce, but is biased to fall
below $1,564.44, said Reuters market analyst Wang Tao.
 
    
    Physical buying interest in Southeast Asia was slow, as
customers waited for a clear price direction.
    "We don't hear from them on new indent," said a
Singapore-based dealer, "Customers are not keen to buy since we
have settled in a range for a while."
    Gold has traded in the range of roughly $1,560 to $1,580
since the beginning of March. 
    Holdings of SPDR Gold Trust, the world's biggest
gold-backed exchange-traded fund, fell 3.311 tonnes to 1,239.739
tonnes by the end of last week, the lowest since October 2011.
    SPDR Gold Trust has seen more than 111 tonnes of outflows 
this year, wiping out the total 96.25 tonnes of inflow in 2012,
reflecting investors' shifting interest away from safe havens.  
  
    Echoing the sentiment of gold ETF investors, hedge funds and
money managers cut their net long positions in U.S. gold futures
and options by nearly 27 percent to 39,631 contracts in the week
to March 5, the lowest since July 2007, data from the Commodity
Futures Trading Commission showed. 
    Net longs in silver dropped 47 percent on the week to 6,118
lots, the lowest in more than seven months, the data also
showed. 
    Spot palladium dropped 1.5 percent to $768.22, off
Friday's peak at $784.50, its highest since September 2011.
    
      Precious metals prices 0634 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1582.11    4.37   +0.28     -5.52
  Spot Silver        29.04    0.08   +0.28     -4.10
  Spot Platinum    1599.50   -0.49   -0.03      4.20
  Spot Palladium    768.22  -12.00   -1.54     11.01
  COMEX GOLD APR3  1581.30    4.40   +0.28     -5.64        18394
  COMEX SILVER MAY3  29.04    0.09   +0.32     -3.94         3401
  Euro/Dollar       1.3012
  Dollar/Yen         96.06
  COMEX gold and silver contracts show the most active months
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