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