PRECIOUS-Gold rebounds on crude oil gains, short-covering

Thu Jul 18, 2013 2:54pm EDT

* Partially recovers previous day's loss after Bernanke
remarks
    * U.S. weekly jobless claims fall sharply, factory activity
up
    * SPDR Gold Trust holdings down, investment demand weak
    * Coming up: U.S. CFTC Commitments of Traders Friday

 (New updates throughout, adds comment, second byline, dateline)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, July 18 (Reuters) - Gold rose on Thursday,
as gains in crude oil prices and short-covering triggered a
rebound rally from the previous day's losses after the Federal
Reserve chief said the U.S. central bank still expects to start
scaling back its monetary stimulus later this year.
    Investors focused on bullion's inflation-hedge appeal as
U.S. crude oil rose to a 16-month high on encouraging U.S. job
market and manufacturing data, partially recovering from gold's
1.3 percent drop on Wednesday. 
    In his second day of congressional testimony, Fed Chairman
Ben Bernanke affirmed that the Fed would likely reduce its
program of buying $85 billion of bonds a month later in 2013 and
halt it altogether by mid-2014, and he left open the option of
changing stimulus exit plans if the economic outlook grew worse.
    "A sustained positive move in gold likely requires a
significant deterioration in U.S. economic prospects, which may
steady the Fed's hand from removal of monetary accommodation,"
said Robert Haworth, senior investment strategist at U.S. Bank
Wealth Management.
    Otherwise, gold is likely to fall as continued liquidation
by speculators overwhelms strong physical demand from China and
India, Haworth said.
    Spot gold rose 0.8 percent to $1,285.21 by 2:24 p.m.
EDT (1824 GMT).
    U.S. gold futures for August delivery settled up
$6.70 to $1,284.20 an ounce, with trading volume about 30
percent below its 30-day average, preliminary Reuters data
showed.
    Gold held gains after government data showed U.S. jobless
claims fell and factory activity picked up in the Mid-Atlantic
region. 
    The data could reinforce the view that the Fed will start
winding down its massive stimulus program as early as September.
    Bullion has slipped more than 20 percent this year, losing
its safe-haven appeal after the Fed earlier this year signalled
it would look to rein in its monetary stimulus.
       
    SPDR HOLDINGS FALL
    As a gauge of investor sentiment, holdings of the world's
largest gold-backed ETF SPDR Gold Trust fell 1.5 tonnes to
937.57 tonnes on Wednesday. The fund has seen outflows of around
370 tonnes, or about $17 billion at current prices, so far this
year.
    Gold's recent weakness has attracted buying in the physical
sector, but demand from top consumer India has been muted after
the government raised its import duty and stopped consignment
imports, cutting imports by 81 percent in June. 
    Silver rose 0.9 percent to $19.43 an ounce. Among
platinum group metals (PGMs), platinum gained 0.5 percent
to $1,411.59 an ounce, while palladium rose 1.4 percent
to $742.97 an ounce. 
    Investors now digest news General Motors Co is
preparing to put its full-size pickup trucks on a severe diet to
meet future U.S. fuel economy standards and stay competitive
with rivals. Lighter trucks with lower fuel consumption are
likely to require less PGMs as autocatalyst. 

 2:24 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1284.20   6.70   0.5  1273.30 1287.90  113,213
 US Silver SEP  19.389 -0.031  -0.2   19.215  19.570   35,884
 US Plat OCT   1414.80   3.80   0.3  1406.10 1419.90    4,718
 US Pall SEP    747.50  12.05   1.6   726.60  751.60    3,713
                                                               
 Gold          1285.21   9.82   0.8  1274.78 1288.09         
 Silver         19.430  0.180   0.9   19.280  19.560
 Platinum      1411.59   6.59   0.5  1408.00 1416.25
 Palladium      742.97   9.97   1.4   730.25  748.00
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        135,904   194,362   179,327     22.28   -0.90
 US Silver       39,878    65,308    56,395     31.46    1.50
 US Platinum      4,789    15,758    13,075        26   -0.47
 US Palladium     3,773     4,307     5,464                  
                                                               
   

 (Additional reporting by Lewa Pardomuan in Singapore; editing
by David Cowell, David Evans and Marguerita Choy)
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