PRECIOUS-Gold rises nearly 1 pct on weak manufacturing data

Thu Feb 20, 2014 3:51pm EST

* Fed tapering, better overall economy seen bearish -trader
    * 80 pct of Swiss gold exports head for Asia
    * South African union vows to prolong platinum strike
    * Coming up: U.S. existing home sales Friday

 (Adds comment, second byline, dateline, updates market
activities)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Feb 20 (Reuters) - Gold rose on Thursday
due to disappointing U.S. and Chinese manufacturing data, but
overall improvement in global economic conditions and continued
stimulus tapering by the Federal Reserve could dent safe haven
demand, traders said.
    The yellow metal benefited after data showed factory
activity in China fell to a seven-month low and a closely
watched gauge of the U.S. manufacturing sector fell sharply.
 
    Bullion's gain on Thursday followed two consecutive days of
losses. Minutes of the Fed's latest policy meeting showed
several policymakers wanted to keep cutting monetary stimulus,
weighing down on gold's inflation-hedge appeal.
    "There is no real indicator right now as to which direction
the economy is going. The belief is that it is turning around
and Fed tapering will likely continue, so there is no need for
safe-haven physical assets," said Thomas Capalbo, a precious
metals trader at Newedge, a brokerage in New York.
    Spot gold was up 0.9 percent at $1,323.31 an ounce by
3:23 p.m. EST (2023 GMT).
    Gold rose in tandem with a U.S. equities market, with the
S&P 500 index up about 0.7 percent. The strong inverse
correlation between gold and equities earlier this year has
shown signs of weakening lately, traders said.    
    U.S. COMEX gold futures for April delivery settled
down $3.50 at $1,316.90, with trading volume about 20 percent
below its 30-day average, preliminary Reuters data showed.

    ASIAN BUYERS STEP IN AS PRICES FALL
    On the physical market, dealers expected jewellers across
Asia to buy on dips, while India's plan to keep tax on gold
imports at current levels could underpin sentiment in the
physical market as it will lead to more smuggling.
 
    The top five recipients of Swiss gold exports in January
were in Asia, with Hong Kong the top destination for shipments
out of Europe's leading refining centre, data from the Swiss
customs office showed on Thursday. 
    Among other precious metals, silver rose 1.5 percent
to $21.85 an ounce. Platinum eased 0.2 percent to
$1,410.60 an ounce, while palladium was up 0.3 percent at
$732.60 an ounce.
    Platinum group metals were underpinned by news South
Africa's Association of Mineworkers and Construction Union
(AMCU) vowed to continue a strike against the world's top three
platinum producers. 
 3:23 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APER   1316.90  -3.50  -0.3  1307.10 1323.70  115,651
 US Silver MAR  21.684 -0.166   -0.8   21.400  21.865   55,246
 US Plat APER   1412.50 -12.00  -0.8  1406.50 1418.60    7,831
 US Pall MAR    736.30   0.90    0.1   728.20  737.95    4,301
                                                               
 Gold          1323.31  12.06   0.9  1307.90 1323.31         
 Silver         21.850  0.330   1.5   21.430  21.850
 Platinum      1410.60  -2.65  -0.2  1409.50 1416.50
 Palladium      732.60   1.85   0.3   731.75  736.50
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D VGA  250D AVG   CURRENT     CHG
 US Gold        131,111   165,254   183,267     15.85   -0.51
 US Silver       77,223    60,004    57,325     27.95    0.06
 US Platinum      8,554    10,800    13,321      17.8   -0.60
 US Palladium     6,499     6,374     5,692     14.56   -0.63
                                                               
     

 (Additional reporting by Lewa Pardomuan in Singapore; Editing
by Anthony Barker and Nick Zieminski)
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