(Adds details on retail performance, platinum group metal
By Frank Tang and Jan Harvey
NEW YORK/LONDON, April 1 Gold fell to a
seven-week low on Tuesday after firm U.S. manufacturing data
lifted U.S. equities, but strong physical demand from Asia was
expected to underpin prices.
Bullion came under pressure after data showed U.S. factory
activity rose in March, with production posting its biggest
increase since the recession ended in the latest indication the
economy was regaining its footing after a brutal winter.
Receding geopolitical tensions and fears the Federal Reserve
will raise interest rates next year are also weighing on gold,
"Given gold's recent drop below $1,300 an ounce, we have
noticed a slight increase in physical demand from Asia. Further
weakness to gold prices may elicit stronger buying from the
emerging markets and help cushion further losses," said James
Steel, chief precious metals analyst at HSBC.
Spot gold was down 0.3 percent at $1,279.76 an ounce
by 4:43 p.m. EDT (2043 GMT), having earlier hit $1,277.29 an
ounce, its lowest since Feb. 11.
U.S. COMEX gold futures for June delivery settled
down $3.80 an ounce at $1,280. Trading volume was about 45
percent below its 30-day average, preliminary Reuters data
The S&P 500 closed at a record on Tuesday on the positive
manufacturing data, weighing heavily on gold's appeal as a hedge
against economic uncertainty.
Silver was up 0.3 percent at $19.77 an ounce.
RETAIL DEMAND WEAK
In the retail gold market, buying sentiment among private
bullion investors edged down in March on easing geopolitical
tensions, said a survey by online precious metals market
The Gold Investor Index, which measures the balance of
customers adding to gold holdings over those reducing them, was
down to 53 in March from 53.5 in February. A reading of 50
signals an equal number of net gold buyers and sellers.
Overall client holdings, however, rose during the month, the
"Buyers are continuing to build their positions at these
lower price levels which now seem like a bargain," said Miguel
Perez-Santalla, vice president of BullionVault.
Institutional investment interest was also weak, with the
world's largest gold-backed exchange-traded fund, the SPDR Gold
Shares, reporting an outflow of 3.9 tonnes on Monday, its
largest one-day outflow in nearly six weeks.
Platinum group metals rose on supply worries and encouraging
U.S. auto sales for March.
Platinum rose 1.2 percent to $1,425.50 an ounce,
while palladium was up 0.5 percent at $776.10 an ounce.
4:43 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold JUN 1280.00 -3.80 -0.3 1277.40 1288.40 102,914
US Silver MAY 19.688 -0.064 -0.3 19.635 19.910 30,237
US Plat JUL 1429.60 8.80 0.6 1415.50 1437.20 11,272
US Pall JUN 781.95 4.85 0.6 767.00 782.70 4,736
Gold 1279.76 -3.88 -0.3 1278.25 1288.10
Silver 19.770 0.060 0.3 19.670 19.890
Platinum 1425.50 16.30 1.2 1416.50 1432.50
Palladium 776.10 4.20 0.5 769.25 780.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 111,160 196,679 182,829 17.44 0.06
US Silver 38,394 48,024 58,338 24.94 -0.86
US Platinum 11,419 17,961 12,577 17.99 0.66
US Palladium 4,863 6,653 5,795 28.17 0.38
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by David Evans, Jane Baird, Meredith Mazzilli and Eric