PRECIOUS-Gold eases in low volume, ETF outflows in focus

Mon May 6, 2013 2:26pm EDT

* Volume light as London markets closed
    * Mario Draghi says ECB standing ready for another rate cut
    * Outflows from gold-backed ETFs continue
    * Coming up: U.S. consumer credit data due Tuesday

 (Updates throughout, adds comment, second byline, dateline)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, May 6 (Reuters) - Gold eased in quiet trade
on Monday on continued outflows in bullion-backed
exchange-traded funds, and investors were still weighing the
metal's inflation-hedge appeal after last week's encouraging
U.S. jobs data.
    Trading volume was much lower than usual as London markets
were closed due to the Bank Day holiday.
    The metal largely ignored comments by European Central Bank
President Mario Draghi affirming ECB's readiness to cut interest
rates again if the euro zone economy deteriorates further. Last
week, the central bank cut rates to a record low.
 
    Outflows from bullion-backed exchange-traded products, which
have hit record levels in recent months, continued but appear to
have slowed. The world's largest gold-backed ETF, SPDR Gold
Trust, reported an outflow of 3.6 tonnes on Friday. 
    "We continue to believe exchange-traded product outflows
remain a key downside risk in the near term," said Suki Cooper,
precious metals strategist at Barclays Capital.
    Cooper said the risk of further losses in bullion held by
gold ETPs is likely to decline if gold prices recover to above
$1,500 an ounce.
    Spot gold was down 0.1 percent to $1,468.70 an ounce
by 1:51 p.m. EDT (1751 GMT). 
    U.S. Comex gold futures for June delivery edged up
$3.80 to settle at $1,468, with trading volume at just over
80,000 lots, about 65 percent below its 30-day average,
preliminary Reuters data showed.
    Some buyers have been lured back to the gold market after
bullion posted a second consecutive week of gains last week,
which suggested last month's price slide to the lowest level in
more than two years has run its course for now, analysts said.
    Bullion held firm and ended flat on Friday after data showed
U.S. employment rose more than expected in April, which eased
concerns over the U.S. recovery and dampened talk that further
monetary easing may be necessary.    
    "With the Fed's recent commitment to stand ready to alter
the pace of QE, based on employment and inflation expectations,
bullion prices are likely to remain highly sensitive to changes
in U.S. employment data," HSBC said in a note.
    

    PHYSICAL DEMAND FIRM, PREMIUM HIGH
    Dealers pointed out rising demand from China, the world's
second-largest gold consumer, as Shanghai gold futures <0#SHAU:>
fetched premiums of more than $10 an ounce to cash gold, making
it cheaper to buy the metal from the overseas market. 
    A surge in physical buying in Asia and other parts of the
world lifted gold prices from April's low of $1,321.35 an ounce,
leading to a shortage of gold bars, coins and nuggets in Hong
Kong, Singapore and Tokyo. 
    Among other precious metals, silver edged down 0.5
percent to $23.96 an ounce. Platinum was up 0.5 percent
at $1,502.74 an ounce, and palladium climbed 0.6 percent
to $694.47 an ounce.
 1:51 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1468.00   3.80   0.3  1463.80 1478.40   74,360
 US Silver JUN  23.936 -0.058  -0.2   23.820  24.365      125
 US Plat JUL   1507.70   6.50   0.4  1491.80 1509.00    3,629
 US Pall JUN    697.10   3.80   0.5   690.15  697.50    1,216
                                                               
 Gold          1468.70  -1.50  -0.1  1465.43 1478.45         
 Silver         23.960 -0.120  -0.5   23.870  24.420
 Platinum      1502.74   6.74   0.5  1493.50 1507.50
 Palladium      694.47   3.97   0.6   692.25  694.76
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold         80,937   231,154   177,671     19.29   -0.30
 US Silver       21,140    78,477    55,014     28.43   -1.87
 US Platinum      3,717    14,430    11,921     19.99    1.13
 US Palladium     1,317     5,126     5,073                  
                                                               
 
 (Additional reporting by Lewa Pardomuan in Singapore; editing
by Jason Neely and John Wallace)