PRECIOUS-Gold eases after 5-day rally, Syria eyed

Thu Aug 29, 2013 3:07am EDT

* Traders wait for fresh news on Syria, take profits
    * Physical demand weakens, scrap selling picks up
    * Asian shares bounce from sharp losses 

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Aug 29 (Reuters) - Gold eased on Thursday from a
five-day rally that had pushed it to its highest since mid-May,
losing some of its safe-haven appeal as the chance of imminent
U.S. military strikes against Syria seemed to diminish and
investors booked profits.
    The United States and its allies have been discussing
possible military action against Syria for last week's deadly
chemical attack, stoking buying interest in gold and pushing it
above $1,400 an ounce for the first time since early June. 
    But U.S. President Barack Obama said on Wednesday any strike
would be "tailored, limited," even as he faced new obstacles
with allies and lawmakers that could delay any immediate action.
 
    "Since there hasn't been any fresh news on the Syrian
conflict, some people are taking profit above $1,400 levels,"
said Yuichi Ikemizu, a branch manager for Standard Bank in
Tokyo.
    "Gold could rally to $1,440-$1,450 if the U.S. strikes, but
since it is expected to be a short engagement, the rally will
not be that huge."
    Spot gold had dropped 0.8 percent to $1,406.40 an
ounce by 0650 GMT on Thursday. It had gained nearly $70 an ounce
in the five sessions to Wednesday. 
    At its 3-1/2 month high of $1,433.31 hit on Wednesday, gold
had gained 21 percent from the three-year low of $1,180.71 hit
on June 28, pushing the metal into bull-market territory.
    Some analysts say prices are bound to fall as the rally over
the last few days has also been spurred by short-covering and
technical buying.
    
    PHYSICAL SELLING UP
    Demand for physical gold in Asia slowed this week as spot
prices surged and emerging market currencies plunged. Premiums
in Singapore, Hong Kong and Tokyo all fell from two weeks ago.
 
    Standard Bank's Ikemizu said consumers were selling their
old gold due to the higher prices, especially in Southeast Asia.
    "We hadn't seen any scrap selling in the last couple of
months. The $1,400 level is enough to bring some sellers,"
Ikemizu said.
    
  Precious metals prices 0650 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1406.40  -11.24   -0.79    -16.01
  Spot Silver        23.90   -0.44   -1.81    -21.07
  Spot Platinum    1521.00   -9.60   -0.63     -0.91
  Spot Palladium    739.00   -4.00   -0.54      6.79
  COMEX GOLD DEC3  1406.80  -12.00   -0.85    -16.05        27916
  COMEX SILVER SEP3  23.95   -0.45   -1.83    -20.99         7287
  Euro/Dollar       1.3268                                               
  Dollar/Yen         98.09                                                                                                                   
                                                                                                                                             
  COMEX gold and silver contracts show the most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Tom Hogue)
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