PRECIOUS-Gold down 1 pct as strong U.S. data dents safe havens

Tue May 28, 2013 4:05pm EDT

* Rising U.S. home prices, consumer confidence gain weigh
    * Technical resistance near $1,400 seen capping possible
upside
    * U.S. Mint resumes small American Eagle gold coin sales

 (Adds market details, updates prices)
    By Frank Tang
    NEW YORK, May 28 (Reuters) - Gold fell 1 percent on Tuesday
as an equities market rally driven by encouraging U.S. home
sales and consumer confidence data decreased bullion's
safe-haven appeal.
    Strong buying of physical bullion on Tuesday, however,
briefly reversed gold's fall caused by a dollar rise. 
    "Every time when gold prices drop, we start to see a sharp
pick-up in physical demand. Dealers are buying for fear of a
sharp correction higher," said Phillip Streible, senior
commodities broker at R.J. O'Brien.
    The metal continued to feel pressure from chart-based sell
orders which stopped the recovery after its failure to break
above its 14-day moving average near $1,400 an ounce triggered
selling.     
    Turnover was higher than usual due to Tuesday's Comex June
option expiration and pent-up trading from Monday, traders said.
The U.S. market was shut on Monday for the Memorial Day holiday.
    Spot gold was down 1 percent to $1,380.81 an ounce by
3:25 p.m. EDT (1925 GMT), after trading as low as $1,373.14.
    U.S. stocks advanced on Tuesday after central banks
reassured investors that they will keep policies designed to
foster global growth, while prices of other safe havens such as
U.S. Treasuries fell sharply.  
    U.S. consumer confidence was the strongest in May in over
five years, while home prices accelerated in March by the most
in nearly seven years. The reports suggested resilience for an
economy despite the pinch of belt-tightening from automatic cuts
in federal spending. 
    U.S. Comex gold futures for June delivery settled
down $7.70 at $1,378.90 an ounce.
    Trading volume was near 410,000 lots, preliminary Reuters
data showed, set to be the highest turnover since it hit a
record on April 15 at about 750,000 contracts.
 
    U.S. MINT RESUMES SMALL GOLD COIN SALES
    The U.S. Mint said on Tuesday it is resuming sales of its
small American Eagle gold bullion coins, a month after the price
of the precious metal plunged to two-year lows, triggering
soaring demand for the coins and depleting the government
inventory. 
    The Mint is also lifting allocations - essentially purchase
limits for its authorized coin dealers - on the America the
Beautiful five-ounce silver coins, effective Tuesday.
    The moves by the U.S. Mint, one of the world's largest gold
and silver coin producers, are a further sign that a coin-buying
frenzy has started to fade after investors took advantage of
bargain prices following gold's historic two-day sell-off in
mid-April.
    Investment demand in gold remains weak. Holdings in SPDR
Gold Trust, the world's largest gold-backed
exchange-traded fund, were at their lowest since mid-February
2009, falling 0.2 percent to 1,016.16 tonnes on Friday. The fund
held 1,350.50 tonnes of gold at the beginning of 2013.
 
    Among other precious metals, silver was down 1.7
percent to $22.25 an ounce. Platinum rose 0.6 percent to
$1,455.74 an ounce, while palladium gained 2.1 percent to
$751.22 an ounce.
    
 3:25 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1378.90  -7.70  -0.6  1372.10 1401.00  272,091
 US Silver JUL   22.19  -0.303 -1.4   22.110  22.710   47,298
 US Plat JUL   1461.80   9.90   0.7  1445.20 1471.00   11,314
 US Pall JUN    757.00  30.55   4.2   726.65  764.90   11,390
                                                               
 Gold          1380.81 -13.47  -1.0  1374.28 1399.55         
 Silver         22.250 -0.380  -1.7   22.180  22.640
 Platinum      1455.74   8.24   0.6  1449.25 1467.24
 Palladium      751.22  15.22   2.1   730.27  760.97
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        407,883   250,431   180,078     23.08   -0.36
 US Silver       53,509    77,058    55,503     33.53   -2.58
 US Platinum     11,752    12,248    11,854     23.44   -0.13
 US Palladium    21,027     6,258     5,171                  
                                                               
   

 (Additional reporting by A. Ananthalakshmi in Singapore and
Veronica Brown and Silvia Antonioli in London; Editing by Alden
Bentley and James Dalgleish)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.