PRECIOUS-Gold drops 1.4 pct on month-end profit taking, dollar rise

Thu Oct 31, 2013 4:35pm EDT

Related Topics

* Silver down more than 3 pct, platinum group metals slump
    * End of month, FY selling by commodity funds weighs
    * Follow-through weakness from Fed policy statement seen
    * Coming up: US ISM index Friday


    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Oct 31 (Reuters) - Gold and other precious
metals fell on Thursday as commodity funds sold to square books
at the end of October, and as investors kept selling after the
Federal Reserve's latest policy outlook offered few surprises.
    Gold's daily decline was the second biggest among
commodities. For the month, gold ended October just 0.2 percent
lower, its decline limited by economic uncertainty over a
partial U.S. government shutdown and Washington's delay in
raising the U.S. debt ceiling. 
    On Thursday, a sharp rise in the dollar index broadly
pressured commodities after data showed business activity in the
U.S. Midwest surged past expectations in October, countering
recent evidence of soft economic growth. 
    "We are seeing some liquidation on the dollar rise and
higher Treasury yields. Uncertainty in the equities market is
also prompting some gold investors to take profits at the end of
the month," said Tom Power, senior commodity broker at RJO
Futures. 
    The S&P 500 equities index ended down 0.4 percent on
Thursday.   
    Spot gold was down 1.4 percent at $1,323.69 an ounce
by 4:07 p.m. EDT (2007 GMT). During the session, gold hit a
one-week low at $1,318.79.
    U.S. gold futures for December delivery settled down
$25.60 at $1,323.70 an ounce, with trading volume largely in
line with its 30-day average, preliminary Reuters data showed.
     Comex gold options floor trader Jonathan Jossen said many
commodity funds close out core positions and make funds
available for year-end taxes on Oct 31, the last day of the
fiscal year for such funds. 
    On Wednesday, gold fell after the Fed did not sound quite as
alarmed about the economy after its last policy meeting as some
had anticipated. The U.S. central bank kept its $85
billion-a-month stimulus plan intact. 
    Silver underperformed gold and was the biggest
decliner in the 19-commodity Thomson Reuters/CoreCommodity CRB
index. It fell 3.3 percent at $21.90 an ounce, its
biggest one-day loss in more than a month. 
    
    CHINA PREMIUMS ERASED
    Bullion was also undermined by slow physical buying in Asia,
especially China.
    Premiums of physical gold bars on the Shanghai Gold Exchange
have largely faded due to fears of a cash crunch, dealers said.
 
    Data showed that China in September bought more than 100
tonnes of gold from Hong Kong for a fifth straight as demand for
bullion bars and jewellery was strong. 
    Spot platinum was down 1.5 percent at $1,447.24 an
ounce, while spot palladium fell 1 percent to $735.22 an
ounce.
 4:07 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1323.70 -25.60  -1.9  1318.70 1343.00  143,860
 US Silver DEC  21.867 -1.116  -4.9   21.730  22.690   51,148
 US Plat JAN   1448.40 -31.50  -2.1  1446.70 1472.50    9,181
 US Pall DEC    736.80 -12.70  -1.7   735.10  746.60    5,448
                                                               
 Gold          1323.69 -18.50  -1.4  1318.79 1342.79         
 Silver         21.900 -0.740  -3.3   21.840  22.690
 Platinum      1447.24 -22.76  -1.5  1450.50 1470.50
 Palladium      735.22  -7.78  -1.0   738.00  743.47
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        149,714   154,161   188,108     20.21   -0.61
 US Silver       54,084    42,028    55,755     29.18   -0.14
 US Platinum      9,364    13,309    12,874     16.96    0.00
 US Palladium     5,679     4,073     5,653
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