PRECIOUS-Gold hits 2-mth low on large sell order, hopes U.S. shutdown to end

Tue Oct 1, 2013 8:45pm EDT

SINGAPORE, Oct 2 (Reuters) - Gold fell to two-month lows on
Wednesday, rattled by a large sell order in New York that pushed
prices below $1,300 the session before and on weak safe-haven
buying after what many expect to be a short-lived U.S.
government shutdown. 
    
    FUNDAMENTALS
    * Spot gold had dropped 0.4 percent to $1,280.35 an
ounce by 0024 GMT, after losing 3 percent on Tuesday. 
    * Bullion fell abruptly in early U.S. trading on Tuesday as
a massive Comex sell order appeared to overwhelm the market,
sending prices $25 an ounce lower and triggering further
technical stop-loss selling below $1,300, analysts said. 
    * The early activity stirred market talk of forced
liquidation by a distressed commodities fund and of selling
related to a fund rebalancing on the first day of the third
quarter, although no details could be confirmed.
    * The White House rejected a Republican plan to reopen
portions of the U.S. government on Tuesday as the first shutdown
in 17 years closed landmarks like the Statue of Liberty and
threw hundreds of thousands of federal employees out of
work. 
    * The anticipated unwinding of U.S. stimulus and
expectations of improving economic growth leave little room for
a rebound in gold prices over the next few years, Fitch Ratings
said, adding that a further decline remains a real possibility.
 
    * India's only gold imports in August and September were for
exporters' use, reducing volumes to a fraction of what the
world's biggest bullion buyer used to bring in before the
government took steps to rein in purchases. 
    * Swiss gold refiner Metalor Technologies has postponed the
full-scale launch of its refinery in Singapore to next year due
to a delay in construction, a company executive said.
 
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    MARKET NEWS
    * The dollar and U.S. stock futures held steady on Wednesday
as investors bet the first partial U.S. government shutdown in
17 years would be short-lived.
    
    DATA/EVENTS (GMT) 
    0900 Euro zone Producer price index 
    1215 U.S. ADP employment report 
    1230 European Central Bank interest rate decision 
    1345 U.S. ISM-New York business activity 
    1930 Federal Reserve Chairman Bernanke speaks

 Precious metals prices 0024 GMT
 Metal             Last    Change  Pct chg  YTD pct chg    Volume
 Spot Gold        1280.35   -5.64   -0.44    -23.54
 Spot Silver        21.03   -0.08   -0.38    -30.55
 Spot Platinum    1374.00   -0.60   -0.04    -10.49
 Spot Palladium    712.22   -2.78   -0.39      2.92
 COMEX GOLD DEC3  1280.50   -5.60   -0.44    -23.59         8512
 COMEX SILVER DEC3  21.07   -0.11   -0.52    -30.49          838
 Euro/Dollar       1.3512
 Dollar/Yen         98.04
 
 COMEX gold and silver contracts show the most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford)
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