April 30, 2012 / 10:40 AM / 5 years ago

PRECIOUS-Gold posts small monthly loss in April

5 Min Read

* Gold reverses early losses on technical buying
    * Bullion down tad in April, first 3-month drop since 2000
    * CME briefly halted trade on COMEX after sharp drop
    * Coming up: US construction spending Tuesday

 (Adds new details, updates comment)	
    By Frank Tang and Jan Harvey	
    NEW YORK/LONDON, April 30 (Reuters) - Gold prices edged up
o n M onday on a better technical outlook after last week's gains,
but the precious metal finished slightly lower for the month of
April in a narrow trading range.	
    Bullion dropped about 0.3 percent in April, posting a third
straight monthly decline for the first time since 2000. A strong
run of U.S. economic data have hit hopes for more monetary
easing by the Federal Reserve, denting investment appetite for
the precious metal.	
    	
    	
    	
    In early trading on Monday, bullion tumbled 1 percent in
heavy volume. Then it gradually turned higher. Analysts cited
technical buying as the metal held above key support last week.	
    "Gold posted a bullish outside week last week, adding
further fuel to our belief that a base is being formed for the
next rally higher," Tom Fitzpatrick, a strategist at Citigroup's
technical research unit CitiFX.	
    Gold's ability to hold above $1,620 an ounce this month,
despite several tests of that level, cheered investors.	
    Fitzpatrick said gold's next target could be its February
high at $1,790 an ounce, but its rise in the near term may be a
gradual grind instead of an imminent acceleration.	
    Spot gold inched up 0.1 percent to $1,664.20 an ounce
by 3:42 p.m. EDT (1942 GMT).	
    U.S. gold futures for June delivery settled down 60
cents an ounce at $1,664. Monday's volume was about 30 percent
below its 30-day average, preliminary Reuters data showed.	
    	
    BRIEF US MARKET HALT	
    Early in the U.S. session, the June contract had tumbled as
much as $12 within a minute in one sell-order that involved
nearly 8,000 lots. The anomaly and its swift recovery has
spurred market talk that trade might have been entered
erroneously.	
    A CME Group spokesman said the exchange's Stop Logic
functionality was triggered on COMEX June futures Globex at 8:31
a.m. EDT ( 1231 GMT), resulting in a 10-second trading halt. But
he said the market worked in an orderly fashion.	
    CME Group's Stop Logic offers market participants the
opportunity to provide additional liquidity and permits the
market to regain its equilibrium.	
    "It was a very sudden hard drop, but there was no panic that
you'd see surrounded a fat finger," said James Steel, chief
commodity analyst at HSBC, referring to the sudden drop.	
    Analysts said prices tend to sharply recoil following the
so-called "fat finger" trade. On Monday, gold prices gradually
recovered rather than rebounding sharply.	
    News that Spain slipped back into recession also pressured
gold, traders said, as did a weak report on U.S. spending and a
sharp decline in business activity in the U.S. Midwest.	
    Investors were also wary of buying euros before weekend
elections in France and Greece and a European Central Bank
meeting this week that could further knock sentiment on the euro
zone currency.	
    Among other precious metals, silver was down 0.9
percent at $30.96 an ounce. Spot platinum eased 0.2
percent at $1,562.59 an ounce, while spot palladium eased
0.1 percent at $677.20 an ounce.	
    	
 3:42 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1664.20  -0.60   0.0  1645.10 1667.00  107,668
 US Silver MAY  30.959 -0.388  -1.2   30.550  31.380    2,357
 US Plat JUL   1571.90  -3.80  -0.2  1566.30 1578.80    2,842
 US Pall JUN    682.35   0.85   0.1   675.60  685.00    1,717
                                                               
 Gold          1664.20   1.88   0.1  1645.50 1666.10         
 Silver         30.960 -0.270  -0.9   30.610  31.390
 Platinum      1562.59  -3.76  -0.2  1568.75 1572.99
 Palladium      677.20  -0.78  -0.1   677.75  682.25
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        121,211   170,578   196,158     18.19    1.09
 US Silver       36,752    55,134    65,407     25.55   -1.01
 US Platinum      2,895     7,241     8,363        19    0.00
 US Palladium     1,937     2,713     4,697                  
                                                               
 	
 (Editing by Bob Burgdorfer; Editing by David Gregorio)

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