PRECIOUS-Gold falls 1.5 pct on dollar gain, posts weekly drop

Fri May 10, 2013 3:08pm EDT

Related Topics

* Technical sell-stops triggered below support at $1,450/oz
    * Major gold buying event in India should underpin
    * Biggest gold ETF reports first inflow since mid-March


    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, May 10 (Reuters) - Gold fell nearly 1.5
percent on Friday as a sharp rise in the dollar against the
Japanese yen triggered technical selling, sending the metal to a
two-week low.
    Bullion posted a weekly drop of around 2.5 percent as
continued outflows in gold-backed exchange-traded funds more
than offset strong physical retail demand following gold's
historic selloff in mid-April.
    Gold slid for a second consecutive day as the yen plummeted
to its lowest against the U.S. dollar in more than four
years on Friday, a day after the U.S. currency rose above the
100-yen level. The dollar rally also weighed on industrial
commodities led by crude. 
    "It's all about the dollar strength. That's where all the
fast money is going," said Miguel Perez-Santalla, vice president
of BullionVault, an online physical gold and silver market.
    "I think this is another opportunity for physical buyers,"
he said.
    Gold's sharp losses last month has intensified a disconnect
between funds that sold on dissatisfaction over bullion's
underperformance and individual investors who could not get
enough physical gold coins and bars at bargain prices.
    Spot gold fell as much as 2.5 percent to a low of
$1,420.60 an ounce earlier in the session. It was down 1.3
percent at $1,438.51 an ounce by 2:28 p.m. (1828 GMT)
    U.S. Comex gold futures for June delivery settled
down $32 at $1,436.60 an ounce, with trading volume around 10
percent above its 30-day average, preliminary Reuters data
showed.
    Gold accelerated losses after sell-stops were triggered
below technical support at $1,450 an ounce, said Carlos Sanchez,
director of commodities and asset management at CPM Group.
    Bullion's failure to break above a $40 trading range in the
past two weeks suggested sentiment remains weak after the metal
plunged to $1,321.35 an ounce on April 16, its lowest in more
than two years, analysts said.

    ETF REPORTS INFLOW
    On Thursday, the world's largest gold-backed ETF, the SPDR
Gold Trust, reported its first daily inflow since March
19. SPDR Gold's holdings are down 167.1 tonnes so far in the
second quarter. 
    Hopes of surging physical bullion demand from China and
India could further support bullion prices, analysts said.
    CPM Group's Sanchez cited Akshya Tritiya, a key gold-buying
Hindu festival on May 13, for near-term support to bullion
prices.
    Platinum group metals were down after Anglo American
Platinum said on Friday it would cut 6,000 South
African mining jobs, fewer than half the 14,000 initially
proposed. 
    Platinum was down 1.1 percent at $1,484.99 an ounce,
while palladium inched down 3 cents to $703.97 an ounce.
    Silver edged up 0.2 percent to $23.70 an ounce. 
 2:28 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1436.60 -32.00  -2.2  1418.50 1461.20  215,480
 US Silver JUL  23.658 -0.253  -1.1   23.150  23.875   46,761
 US Plat JUL   1486.00 -30.50  -2.0  1472.30 1515.90   14,040
 US Pall JUN    705.70  -9.05  -1.3   696.60  712.35    5,783
                                                               
 Gold          1438.51 -19.19  -1.3  1421.38 1461.86         
 Silver         23.700  0.040   0.2   23.220  23.900
 Platinum      1484.99 -17.01  -1.1  1475.25 1513.00
 Palladium      703.97  -0.03   0.0   699.25  709.22
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        246,037   218,625   178,227     22.73    3.21
 US Silver       51,625    79,023    55,051     26.51   -1.11
 US Platinum     14,090    12,233    11,819     19.75    0.16
 US Palladium     6,393     5,321     5,015
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