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PRECIOUS-Gold lingers around $1,590, heads for 2nd weekly gain
March 15, 2013 / 3:41 AM / 5 years ago

PRECIOUS-Gold lingers around $1,590, heads for 2nd weekly gain

* Gold headed for second week of rise despite upbeat econ
    * Spot gold neutral in $1,575-$1,599/oz - technicals
    * Coming up: U.S. industrial output; 1315 GMT

 (Updates prices)
    By Rujun Shen
    SINGAPORE, March 15 (Reuters) - Gold hovered near $1,590 an
ounce on Friday as upbeat U.S. labour data added to evidence of
an economic recovery that makes safe-haven assets like the
precious metal less attractive.
    But prices were headed for a second straight week of gains
as some investors remained loyal to gold, counting quantitative
easing measures in key economies and lurking risks in the euro
zone among reasons to own bullion -- a hedge against rising
inflation outlook and economic distress.
    "It is a global trend that the value of paper money is
diminishing, which attracts investors to gold, a hard asset,"
said Li Ning, an analyst at Shanghai CIFCO Futures.
    "That's why gold has been resilient recently even though we
have seen good data from the United States, strength in equities
and a firm dollar."
    Data on Thursday showed the number of Americans filing new
claims for unemployment benefits fell for a third straight week
last week, the latest indication the labour market recovery was
gaining traction. 
    That helped lift the Dow Jones industrial average to
another record high at close and extend its winning streak to a
tenth session. 
    Spot gold inched up 0.1 percent to $1,592.05 an ounce
by 0548 GMT, on course for a weekly gain of 0.9 percent.
    U.S. gold was nearly flat at $1,591.00.
    Technical analysis suggested spot gold looks neutral in a
range of $1,575-$1,599 an ounce, and an escape will point a
future direction, Reuters market analyst Wang Tao said.
    Gold may have built a bottom on the chart near $1,550 an
ounce, but a break above $1,600 would not come easily given that
improving economic outlook has driven many investors to seek
fortune in the stock market, despite the factors in favour of
gold investment, analysts said.
    "Gold's fate, we think, will largely ride on what direction
US equity markets will take," said Ed Meir, an analyst at INTL
FCStone, in a research note.
    "In this respect, our view is that only a sizable correction
in US equities will likely prompt funds to get back into gold."
    Indicating dwindling interest in gold investment, holdings
of SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, have dropped 3.432 tonnes so far this week
-- on course for an eleventh week of decline.
    But the holdings were unchanged at 1,236.307 tonnes from a
day earlier on March 14.
    The U.S. Commodity Futures Trading Commission has engaged in
"a couple" of conversations about whether the daily setting of
gold and silver prices in London is open to manipulation,
Commissioner Scott O'Malia said on Thursday. 
 Precious metals prices 0548 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1592.05    2.25   +0.14     -4.93
  Spot Silver        28.94    0.16   +0.56     -4.43
  Spot Platinum    1588.75    2.25   +0.14      3.50
  Spot Palladium    769.47    1.97   +0.26     11.20
  COMEX GOLD APR3  1591.00    0.30   +0.02     -5.06        11524
  COMEX SILVER MAY3  28.93    0.12   +0.41     -4.32         3672
  Euro/Dollar       1.3017
  Dollar/Yen         96.13
  COMEX gold and silver contracts show the most active months
 (Editing by Himani Sarkar)

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