* Liquidation in gold exchange-traded funds hits bullion
* GFMS points to start of longer-term bear market in 2014
* Coming up: U.S. March nonfarm payrolls Friday
(Updates market activities, prices)
By Frank Tang
NEW YORK, April 4 Gold fell for a third straight
session on Thursday, hitting a 10-month low as unprecedented
monetary stimulus from the Bank of Japan and hopes for another
European Central Bank rate cut failed to stem heavy selling of
bullion by funds.
Palladium dropped around 3 percent, dragged down by a
commodities selloff led by crude oil as a four-month high in
U.S. initial jobless claims dented demand hopes.
Data showed investors pulled more money out of gold
exchange-traded funds. Bullion is now testing long-term chart
support around $1,525 an ounce, and analysts warned of further
losses if it breaks below that mark.
"We have a lot of liquidation of the gold ETFs and the short
position on the Comex for gold remains very high, so a lot of
the macro hedge fund selling has put pressure on gold," said
Howard Wen, metals analyst at HSBC.
Spot gold earlier fell as low as $1,539.74 an ounce,
its weakest point since May 30. It was last down 0.2 percent at
$1,554.60 by 3:30 p.m. EDT (1930 GMT).
U.S. Comex gold for June delivery settled down $1.10
at $1,552.40, with volume about 5 percent below its 30-day
average, preliminary Reuters data showed.
The gold market largely shrugged off news that the BOJ had
promised to inject about $1.4 trillion into the Japanese economy
in less than two years, and a pledge by the ECB that it was
"ready to act" if necessary.
Investors will look toward Friday's U.S. employment data for
more signals on the strength of that economy. A strong report
could cause gold to fall further, analysts said, because it
might make it easier for the U.S. Federal Reserve to end
stimulus measures that have made some investors leery of
possible inflation in the world's biggest economy.
Analysts expect Friday's report to show American employers
hired at a moderate pace in March, suggesting the economy was
"If the nonfarm payroll turns out to be a very strong
number, there might be room for gold to fall," Wen said.
ETF HOLDINGS DOWN, GFMS BEARISH
On Wednesday, there was further liquidation of gold-backed
ETFs, with holdings of the world's largest, SPDR Gold Trust
, declining another 2.71 tonnes after the previous
session's 8.1-tonne outflow.
Bullion holdings at the world's major gold ETFs
fell to their lowest since August 2012. Their
drop this week also marked one of the heaviest declines since
gold ETFs posted a record monthly outflow in February. (link.reuters.com/wah27t)
Metals consultancy Thomson Reuters GFMS said in a report
that gold looks likely to enter a bear market cycle in 2014
after more than a decade of gains. The report added to the
downward pressure on gold.
Among other precious metals, silver tumbled to its
lowest level since July 24 at $26.62 an ounce. It was last down
0.1 percent at $26.89.
Platinum dropped to its lowest since late August at
$1,504.50. It was later at $1,522.50, down 0.6 percent, while
palladium was down 3.1 percent at $726.50, having hit a
one-month low of $720.22.
3:30 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold JUN 1552.40 -1.10 -0.1 1539.40 1559.30 174,417
US Silver MAY 26.767 -0.030 -0.1 26.575 27.015 47,608
US Plat JUL 1517.80 -24.10 -1.6 1511.10 1540.30 16,714
US Pall JUN 725.45 -30.00 -4.0 723.00 753.50 10,770
Gold 1554.60 -2.75 -0.2 1540.90 1559.26
Silver 26.890 -0.030 -0.1 26.670 27.060
Platinum 1522.50 -9.00 -0.6 1512.00 1537.50
Palladium 726.50 -23.50 -3.1 725.50 751.25
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 185,732 200,919 172,509 15.56 0.26
US Silver 58,237 53,722 52,120 22.7 1.60
US Platinum 17,085 16,270 11,719 15.46 1.19
US Palladium 10,881 7,021 5,180
(Additonal reporting by Clara Denina and Veronica Brown in
London; Editing by Dale Hudson and David Gregorio)