April 8, 2013 / 9:56 AM / 4 years ago

PRECIOUS-Gold falls on US equities gain, Soros comment

5 Min Read

* Gold momentum fades on S&P gain, dollar rise
    * Sentiment dips, George Soros said gold proves unsafe
    * Investment demand weak as holdings in gold ETF drops
    * Coming up: U.S. wholesale inventories data Tuesday

 (Updates throughout, adds comments, changes byline, dateline,
pvs LONDON)
    By Frank Tang
    NEW YORK, April 8 (Reuters) - Gold fell on Monday as a
stronger performance in U.S. equities and a dollar rise prompted
investors to take profits after its rally in the previous
session.
    Bullion market sentiment was also weakened after billionaire
financier George Soros said gold has been destroyed as a
safe-haven asset, even though central-bank buying should support
prices.
    With a lack of major U.S. economic indicators on Monday,
investors turned to buy riskier assets such as U.S. equities at
gold's expense. The S&P 500 was up around 0.3 percent and
has sharply outperformed gold year to date. 
    "We are going to hold here until that next catalyst comes.
On the upside, the funds appear done liquidating, and gold
should move its way back up once the liquidation is done," said
Phillip Streible, senior commodities broker at futures brokerage
RJ O'Brien.
    Spot gold dropped 0.6 percent to $1,572.75 an ounce
by 2:56 p.m. EDT (1856 GMT).
    On Friday, gold surged nearly 2 percent for its biggest
one-day gain in around five months as disappointing U.S. jobs
data fueled expectations the Federal Reserve will continue its
bullion-friendly bond purchases.
    U.S. gold futures for June delivery settled down
$3.40 at $1,572.50 an ounce on Monday. Trading volume was about
40 percent below its 30-day average, preliminary Reuters data
showed.
    Gold buying dwindled after George Soros told the South China
Morning Post that "gold was destroyed as a safe haven" as the
metal's recent lackluster performance showed it was unsafe.
    Soros also said he expects gold to be supported because of
buying by central banks, but the metal could stay very volatile
with no definite trend on a longer-term basis. 
    Year to date, gold is down 6 percent after it had posted an
annual gain in each of the past 12 years.
    
    ETF OUTFLOWS, FOMC MINUTES EYED
    Investor interest continued to recede, with bullion holdings
at the world's major gold exchange-traded funds 
edging down on Friday. They fell in the previous week to their
lowest since August 2012. 
    Commerzbank analyst Carsten Fritsch said that gold prices
looked vulnerable in the short term after last's week drop to
10-month low, and continued outflows of gold ETFs and bearish
bets by short-term investors could further pressure the metal.
    The release of the FOMC meeting minutes on Wednesday is
likely to be the next main economic event for the market,
analysts said.
    Among other precious metals, silver fell 0.3 percent
to $27.21.
    Platinum was up 0.2 percent to $1,533.99, and
palladium climbed 0.2 percent to $727.97.
 2:56 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1572.50  -3.40  -0.2  1566.60 1582.90   99,112
 US Silver MAY  27.138 -0.082  -0.3   27.070  27.465   29,440
 US Plat JUL   1537.00   1.50   0.1  1530.50 1544.80    7,339
 US Pall JUN    729.80   5.90   0.8   721.30  739.20    3,584
                                                              
 Gold          1572.75  -8.75  -0.6  1567.93 1582.76         
 Silver         27.210 -0.090  -0.3   27.170  27.420
 Platinum      1533.99   2.99   0.2  1532.00 1541.00
 Palladium      727.97   1.56   0.2   724.25  735.75
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        109,161   193,013   173,130     13.94   -0.13
 US Silver       37,937    49,676    52,334     20.42   -2.94
 US Platinum      7,839    15,670    11,832     15.46    1.19
 US Palladium     3,673     6,404     5,219                  
                                                              
    

 (Additional reporting by Clara Denina in London; Editing by
Peter Galloway)

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