PRECIOUS-Gold rise limited by Wall St rally, economic hope

Thu Mar 14, 2013 5:13pm EDT

* U.S. weekly jobless claims fall for third week
    * 10-day winning streak in Dow weighs on gold buying
    * SPDR Gold Trust holdings unchanged after recent losses
    * Coming up: US consumer prices, industrial output Friday

 (Updates throughout, changes dateline, byline, pvs LONDON)
    By Frank Tang
    NEW YORK, March 14 (Reuters) - Gold edged up on Thursday,
paring earlier gains, as a 10-day rally in U.S. equities
benchmark the Dow Jones industrial average and data showing an
improving U.S. labor market recovery dented safe-haven buying.
    The metal's gains were capped by fresh signs of strength in
the U.S. labor market as the number of filings for new
unemployment benefits fell for a third week in a row.
 
    "Investors are now more concerned about equities'
performance and are not buying defensive assets such as gold as
they don't see any risks," said Den Denbow, portfolio manager of
the $1.4 billion USAA Precious Metals and Minerals Fund
 
    Gold has failed to break above the $1,600 mark after several
attempts this week as the Wall Street rally sapped bullion
demand.
    However, gold should benefit from ongoing concerns,
including the U.S. budget deficit and debt ceiling and fiscal
problems in Europe, Denbow said.
    Spot gold was up 0.1 percent to $1,588.46 an ounce by
4:03 (2003 GMT). 
    U.S. COMEX gold futures for April delivery settled
up $2.30 at $1,590.70 an ounce, with trading volume at about 20
percent below its 250-day average.
    Thursday's jobless claims data came on the heels of strong
gains in U.S. employment and manufacturing, which have increased
chances the Federal Reserve might halt its bond-buying program
earlier than thought, analysts said.
    The metal hit a two-week high of $1,599.10 on Wednesday on
continued concerns about the euro zone, but failed to breach the
$1,600 level due to a resurgent dollar and persistent
redemptions in gold-backed exchange-traded funds.
    
    SPDR HOLDINGS LITTLE CHANGED
    Pointing to the recent drop in a key gauge of investor
interest, analysts said investors remained lukewarm toward gold.
    Holdings of the largest gold-backed exchange-traded-fund,
the SPDR Gold Trust, held unchanged on Wednesday after a
record monthly outflow in February.
    The next major economic reading comes on Friday with U.S.
consumer inflation data. Investors will also be anticipating any
word from officials at next week's U.S. central bank policy
meeting.
    Despite an improving economic outlook, analysts expect the
Fed's current $85 billion monthly purchases of mortgage-backed
securities and Treasuries to last through 2013 and into 2014.
 
    Among other precious metals, spot silver was down 0.4
percent to $28.76 an ounce.
    Platinum fell 0.2 percent to $1,585.25, and palladium
 dropped 0.5 percent to $767.06.

 4:03 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1590.70   2.30   0.1  1575.20 1592.20  134,378
 US Silver MAY  28.807 -0.151  -0.5   28.530  28.955   37,366
 US Plat APR   1589.80  -3.30  -0.2  1578.50 1594.90    9,728
 US Pall JUN    770.75  -0.50  -0.1   755.55  774.65    3,859
                                                               
 Gold          1588.46   1.17   0.1  1577.53 1593.00         
 Silver         28.760 -0.110  -0.4   28.590  28.960
 Platinum      1585.25  -3.25  -0.2  1581.75 1591.50
 Palladium      767.06  -3.94  -0.5   759.52  771.25
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        155,010   190,979   175,350     13.17    0.25
 US Silver       44,251    62,138    52,392     19.25   -0.21
 US Platinum     11,306    13,731    10,855     16.43   -0.75
 US Palladium     3,913     8,825     5,254                  
                                                               
       

 (Additional reporting by Clara Denina in London and Melanie
Burton in Singapore; Editing by Peter Galloway)
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