November 18, 2013 / 10:31 AM / 4 years ago

CORRECTED-PRECIOUS-Gold falls as physical demand lags, breaks 3-day rise

(Corrects headline to rise from slide)
    * Gold snaps three days of gains to drift lower
    * S&P and Dow hit record highs, then sell off late
    * Chinese premiums ease; Indian demand stays soft
    * Coming up: U.S. employment costs Tuesday

    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Nov 18 (Reuters) - Gold fell more than 1
percent on Monday as lackluster physical buying prompted traders
to cash in three days' gains, while early gains in equities
dented bullion's safe-haven appeal.
    Gains from the stock market diverted investment interest
from gold, as the Dow and S&P 500 rose to record highs earlier
in the session before equities investors took profits. 
    Bullion came under pressure from global economic optimism on
signs of ambitious economic reform in China and the prospect of
extended stimulus from the U.S. Federal Reserve. 
    Also weighing down on investor sentiment was continued
decline in the holdings of SPDR Gold Shares, the world's
largest gold-backed exchange-traded fund. 
    "Until such time as financial investors - be they short- or
longer-term-oriented - return to the market, gold and silver
will find it hard to make any significant gains," said Eugen
Weinberg, head of commodities research at Commerzbank.   
    Spot gold was down 1.3 percent to $1,272.54 an ounce
by 3:39 p.m. EST (2039 GMT). The metal had gained almost 2
percent in the last three days.
    U.S. gold futures for December delivery settled down
$15.10 an ounce to $1,272.30, with trading volume about 40
percent below its 250-day average, preliminary Reuters data
showed.

    GOLD-BUYING WILTS
    Gold dominated a stampede out of commodities in the week to
Nov. 12 as hedge funds and other speculative investors sold off
more than $4 billion in U.S. futures and options contracts, data
showed on Friday. 
    Gold demand from major consumers in Asia remained muted on
Monday. Chinese premiums have fallen to about $5.50 an ounce
from about $7.50 on Friday.
    Prices are also suffering from a dearth of demand from 
India, which is set to be overtaken by China as the world's No.
1 gold buyer this year after Indian authorities increased import
duties for the metal.
    Among other precious metals, silver was down 1.9
percent at $20.37 an ounce, while  platinum slipped 2.1
percent to $1,406.99 an ounce and palladium fell 2.1
percent to $714.83 an ounce.
 3:39 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1272.30 -15.10  -1.2  1269.20 1289.20  101,686
 US Silver DEC  20.357 -0.370  -1.8   20.290  20.800   46,532
 US Plat JAN   1411.00 -27.90  -1.9  1410.60 1442.00    9,074
 US Pall DEC    716.75 -15.90  -2.2   716.00  733.40    6,805
                                                               
 Gold          1272.54 -17.12  -1.3  1270.73 1290.00         
 Silver         20.370 -0.390  -1.9   20.340  20.800
 Platinum      1406.99 -30.50  -2.1  1412.50 1439.00
 Palladium      714.83 -15.47  -2.1   719.09  729.75
                                                               
 TOTAL MARKET              VOLUME   30-D ATM VOLATILITY
                CURRENT   250D AVG   CURRENT     CHG
 US Gold        113,447   189,283     23.18   -1.01
 US Silver       67,683    58,610     35.14    1.70
 US Platinum      9,326    12,978     20.36    0.00
 US Palladium     9,158     5,806                  
                                                               
 
 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Anthony Barker, Marguerita Choy and James Dalgleish)

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