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PRECIOUS-Gold turns down on profit-taking off its 13-month peak
March 8, 2016 / 10:51 AM / 2 years ago

PRECIOUS-Gold turns down on profit-taking off its 13-month peak

* China’s February exports slump, weighing on equities

* Goldman Sachs keeps bearish view on gold

* Palladium extends gains to 4-month high (Rewrites throughout; updates prices; adds comment, second byline, NEW YORK dateline)

By Marcy Nicholson and Clara Denina

NEW YORK/LONDON, March 8 (Reuters) - Gold turned lower on Tuesday, falling below last week’s 13-month high on profit-taking as the market’s recent rally appeared to lose momentum ahead of the next U.S. Federal Reserve meeting.

Bullion prices rose, and even neared last week’s high of $1,279.60 an ounce, earlier on support from weakness in the dollar and global shares after Chinese trade data fueled concerns about the state of worldwide demand.

Spot gold was down 0.4 percent at $1,262.46 an ounce by 3:10 p.m. EST (2010 GMT), after rising to $1,277.81. U.S. gold for April delivery settled down 0.1 percent at $1,262.90.

“It looks like the market is a bit more open to the idea that the Fed will tighten policy this year and that likely has convinced some players that they should take some money off the table,” said Bart Melek, head of commodity strategy for TD Securities in Toronto.

The Fed will meet March 15-16, when traders expect to gain insight into the U.S. central bank’s next move in monetary policy.

Gold could test $1,300 an ounce if the Fed keeps rates on hold, said Daniel Ang, analyst at Phillip Futures in Singapore.

“A lot of traders are trying to anticipate a ‘no rate hike’ scenario, causing a bit of an increase in gold,” Ang said.

Bullion prices have risen 19 percent so far this year.

Goldman Sachs, however, is sticking to a near-term target of $1,100 for gold.

“The slowing pace of the rally is beginning to cause a few concerns for short-term bullish speculators,” said Fawad Razaqzada, technical analyst for Forex.com.

The market is also focused on Thursday’s policy review by the European Central Bank, which is expected to ease monetary policy, but investors are uncertain about how far it would go.

Also supporting bullion, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, dropped slightly on Friday but stayed near the highest since September 2014.

Spot platinum was down 2 percent at $979 an ounce after hitting a four-month high in the previous session.

“Weak fundamentals together with another bout of ETF outflows are likely to weigh on platinum prices again in the near term,” UBS CIO Wealth Management Research said in a note.

“Platinum should benefit from improving car sales, the (second-half) 2016 industrial backdrop and ebbing ETF outflows over the next 6 to 12 months.”

Spot silver dropped 1.5 percent to $15.41 an ounce, while palladium was down 2.8 percent at $558.50 after touching $580.56, its strongest since November. (Additional reporting by Manolo Serapio Jr in Manila; Editing by David Goodman, Alexander Smith and Richard Chang)

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