PRECIOUS-Gold falls after strong U.S. labor data; platinum falls

Wed Nov 27, 2013 3:54pm EST

Related Topics

* Drop in U.S. jobless claims stirs ideas of Fed tapering
    * Platinum hits four-month low on technical selling
    * China's imports from Hong Kong highest in seven months
    * Coming up: U.S. markets shut on Thursday

 (Adds trader comment, updates market activity)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Nov 27 (Reuters) - Gold fell on Wednesday,
erasing initial gains, as a drop in U.S. jobless claims
supported expectations the Federal Reserve will soon scale back
its monetary stimulus, traders said.
    Platinum dropped about 1.5 percent to a four-month low,
underperforming other precious metals, weighed down by technical
selling and end-of-month book squaring by funds, traders said. 
    Bullion prices were down for a second consecutive day after
the unexpected drop in last week's U.S. jobless claims. However,
a separate report showed continued weakness in business spending
on capital goods. 
    As a gauge of gold interest among funds and institutional
investors, holdings in gold-backed exchange-traded funds fell on
Tuesday, extending a trend of heavy outflows. 
    "Negative sentiment and weak physical demand trends indicate
further weakness in gold prices may continue in the months
ahead," said Robert Haworth, senior investment strategist at the
Private Client Reserve at U.S. Bank Wealth Management.  
    Gold investors digested news that Venezuela is evaluating a
swap agreement involving gold reserves as a way to fortify
dollar supplies in the OPEC nation, a senior government source
told Reuters on Wednesday. 
    Spot gold was down 0.5 percent at $1,236.73 an ounce
by 3:35 p.m. EST (2035 GMT), reversing gains of nearly 1 percent
earlier in the day. 
    U.S. gold futures settled down $3.60 at $1,237.80 an
ounce. 
    Trading volume was at 230,000 lots, preliminary Reuters data
showed, nearly 40 percent above its 30-day average of 165,000
lots, lifted by the December-February contract rollover ahead of
the December contract's first-notice day on Friday.
    With U.S. markets shut on Thursday for the Thanksgiving
holiday, market activity is expected to slow and not pick up
until next week, traders said. 
    
    CHINESE GOLD DEMAND, PLATINUM DOWN
    Losses in the gold market were limited after data showed
China's net gold imports from Hong Kong hit the highest in seven
months in October, while Chow Tai Fook, the world's
largest jewellery retailer by market value, also posted a sharp
rise in profits.  
    Platinum fell 1.4 percent to $1,349.24 an ounce,
having hit a four-month low of $1,346.30.
    Platinum is on track to fall 7 percent for the month.
    Some funds and commodity trading advisors may want platinum
off their books ahead of the end of the month to dress up their
portfolios, and that pressures prices, said Michael Matousek,
head trader at U.S. Global Investors.
    Silver dropped 0.9 percent to $19.65 an ounce, and 
palladium eased 0.3 percent to $714 an ounce.
 3:35 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JAN   1237.80  -3.60  -0.3  1236.00 1253.20      460
 US Silver MAR  19.682 -0.211  -1.1   19.655  20.140   42,851
 US Plat JAN   1352.70 -19.20  -1.4  1351.00 1385.30   10,602
 US Pall MAR    715.95  -2.50  -0.3   715.50  726.30    4,673
                                                              
 Gold          1236.73  -6.17  -0.5  1236.83 1254.20         
 Silver         19.650 -0.180  -0.9   19.650  20.100
 Platinum      1349.24 -18.86  -1.4  1346.30 1382.75
 Palladium      714.00  -1.97  -0.3   717.75  723.25
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        229,887   164,655   187,471        19   -0.17
 US Silver       69,996    56,389    57,404      24.6   -1.72
 US Platinum     11,001     9,465    12,889     16.15   -0.62
 US Palladium     7,463     8,099     5,934     20.42   -0.40
                                                              
 
 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by David Goodman, Jane Baird, Bob Burgdorfer and James
Dalgleish)
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