PRECIOUS-Gold set for second weekly loss as US data sparks stimulus fears

Fri Nov 8, 2013 2:51am EST

* GDP data sent gold below $1,300 to three-week low on Thursday
    * Gold down about 0.4 percent on the week
    * Coming up: U.S. nonfarm payrolls at 1330 GMT

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Nov 8 (Reuters) - Gold was trading near three-week lows on Friday
and heading for a second straight weekly loss after strong U.S. economic growth 
sparked fears the U.S. Federal Reserve may scale back its bullion-friendly bond
purchases this year. 
    U.S. gross domestic product grew at a 2.8 percent annual rate in the third
quarter, the quickest pace in a year, after expanding 2.5 percent in the second
quarter. 
    Investors are now waiting for U.S. nonfarm payroll data later in the day for
further direction and clues on the timing of the tapering of the Fed's economic
stimulus.
    "There is not much interest in gold for the time being," said Ronald Leung,
chief dealer at Lee Cheong Gold Dealers in Hong Kong.
    "Everyone is waiting for the nonfarm payroll data today. There doesn't seem
to be much good news for gold lately."
    Spot gold edged up 0.15 percent to $1,309.56 an ounce by 0737 GMT,
supported by a drop in Asian equities. 
    The metal has lost 0.4 percent for the week, having hit a three-week low of
$1,298.31 on Thursday.
    Gold has lost about a fifth of its value this year due to fears the Fed
would begin cutting back its $85 billion monthly bond purchases. The metal's
inflation-hedge appeal has been burnished by the bond purchases and low interest
rates.
    Investors had believed a prolonged budget battle in Washington in October
would prevent the Fed from withdrawing support for the economy and possibly push
the tapering into next year. However, Thursday's GDP data rekindled fears of a
roll-back at the Fed's December meeting.
    "We expect relatively subdued trading today around the current level of
$1,309 until closer to the nonfarm payrolls tonight," ANZ analysts said in a
note. 
    A stronger-than-expected report would probably see expectations for Fed
tapering pulled forward from the first quarter of 2014 and push the U.S. dollar
higher, they said.
  Precious metals prices 0737 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1309.56    2.01   +0.15    -21.80
  Spot Silver        21.69    0.05   +0.23    -28.37
  Spot Platinum    1451.30    2.55   +0.18     -5.45
  Spot Palladium    757.74   -0.98   -0.13      9.50
  COMEX GOLD DEC3  1309.50    1.00   +0.08    -21.86        12159
  COMEX SILVER DEC3  21.71    0.05   +0.22    -28.38         3053
  Euro/Dollar       1.3406
  Dollar/Yen         98.13
 
  COMEX gold and silver contracts show the most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Richard Pullin and Alan Raybould)
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