PRECIOUS-Gold eases on profit taking; Syria developments eyed

Wed Sep 4, 2013 4:32am EDT

* Gold had gained 1.3 pct on Tuesday, rose above $1,400
    * Obama gets support of key Republicans for Syria strike
    * Asian shares snap 4-day rally as investors exit riskier
assets

 (Adds trader comments, Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Sept 4 (Reuters) - Gold eased on Wednesday on
profit taking and technical selling, pulling back from sharp
gains made in the previous session as U.S. President Barack
Obama won support from key Congressmen for a limited strike
against Syria.
    Silver fell nearly 1 percent as Chinese speculators
took profits, traders said, adding pressure on gold prices that
have been boosted by safe-haven buying from increasing
geopolitical tension in Syria. 
    "Gold ran out of steam and stops kicked in causing some
technical selling," said one trader in Hong Kong, referring to
stop-loss orders.
    "If the Syrian strike does happen, it could add another $20
on gold. However, for the bigger picture we are looking at
non-farm payroll data," the trader said. 
    Markets are awaiting jobs data on Friday for clues on when
the U.S. Federal Reserve will dial back its commodities-friendly
stimulus measures that have helped push gold to record highs.
    Spot gold fell 0.3 percent to $1,407.10 an ounce by
0748 GMT on Wednesday. It rose as high as $1,416 in the previous
session as a missile test by Israeli forces training in the
Mediterranean with the U.S. Navy set nerves on edge.
    Rising geopolitical tensions spur safe-haven buying in gold
as investors dump riskier assets such as stocks.
    Obama secured the backing of Republicans John Boehner and
Eric Cantor in his call for limited U.S. strikes on Syria to
punish President Bashar al-Assad for his suspected use of
chemical weapons against civilians. 
    Traders also weighed comments from Russia President Vladimir
Putin who said he may approve a military operation in Syria if
evidence shows that Damascus carried out chemical weapons
attacks. 
    "The potential for Mideast tensions to intensify would be
bullish for bullion," HSBC analysts wrote in a note. "A key
reason for gold to rally in response to Mideast tensions is the
potential for oil supply disruptions that a U.S. strike or an
escalation of the conflict may trigger." 
    Gold is seen as a hedge against oil-led inflationary
pressures.
    Gold prices were also supported by labour strikes that began
in South Africa's gold mines, with some workers failing to go
underground for the evening shift. 
   
  Precious metals prices 0748 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1407.10   -4.94   -0.35    -15.97
  Spot Silver        23.85   -0.32   -1.32    -21.24
  Spot Platinum    1527.49   -1.51   -0.10     -0.49
  Spot Palladium    715.67   -0.33   -0.05      3.42
  COMEX GOLD DEC3  1407.30   -4.70   -0.33    -16.02        27608
  COMEX SILVER DEC3  23.92   -0.51   -2.08    -21.07        12608
  Euro/Dollar       1.3172
  Dollar/Yen         99.60
 
  COMEX gold and silver contracts show the most active months
 
 (Editing by Muralikumar Anantharaman and Tom Hogue)
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A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

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