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PRECIOUS-Gold rebounds from 2-1/2-month low on Ukraine tensions
September 3, 2014 / 9:46 AM / 3 years ago

PRECIOUS-Gold rebounds from 2-1/2-month low on Ukraine tensions

* Gold rebounds after touching 2-1/2-month low early
    * Private gold investor sentiment slips in August
    * U.S. August auto sales highest in more than a decade
    * Coming up: U.S. jobless claims, ECB meeting Thursday

 (Adds details on private investor sentiment, updates market
prices)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Sept 3 (Reuters) - Gold prices rose on
Wednesday, as lingering tensions over Ukraine and a weaker
dollar prompted bargain hunting and short covering after bullion
prices earlier fell to a 2-1/2-month low.
    The yellow metal was under early pressure after Russian
President Vladimir Putin outlined plans for a ceasefire in
eastern Ukraine, but Ukraine's prime minister later dismissed
the proposal as Russia's attempt to deceive the West on the eve
of a NATO summit.  
    But a muted response from physical buyers despite Tuesday's
1.7 percent drop and heightened geopolitical tensions suggested
gold's upside could be limited, analysts said.
    "We believe the lack of physical demand makes gold more
vulnerable to the downside should U.S. employment data surprise
on the upside this Friday," said Edel Tully, a precious metals
strategist at UBS.
    Spot gold was up 0.3 percent at $1,269.80 an ounce by
2:06 p.m. EDT (1806 GMT), after having earlier hit $1,261.19 -
its lowest since June 17.
    U.S. COMEX gold futures for December delivery settled
up $5.30 at $1,270.30 an ounce.
    Gains in gold on Wednesday were capped by more encouraging
economic news including rising new orders for U.S. factory
goods, strong automobile sales and the latest Federal Reserve
Beige Book report on business activities. 
    Physical demand in Asia was muted on Wednesday, despite the
previous session's price drop, traders said, which would usually
be expected to tempt price-sensitive buyers.
    In the retail gold market, private investor sentiment toward
the metal in August slipped despite rising geopolitical
tensions, according to a survey by online precious metals market
BullionVault.
    The Gold Investor Index, which measures the balance of
customers adding to gold holdings over those reducing them,
climbed to 51.7 in August from 51.9 in July. A reading of 50
signals an equal number of net gold buyers and sellers.
    Investment interest in gold has been soft of late. SPDR Gold
Trust, the world's largest gold-backed exchange-traded
fund and a measure of investor sentiment, said its holdings fell
1.8 tonnes to 793.20 tonnes on Tuesday. 
    Among other metals, palladium was down 0.5 percent at
$873.40 an ounce. The standoff between major producer Russia and
Ukraine helped push prices to their highest since early 2002
earlier this week at $910 an ounce.
    The euro's recovery saw the dollar index edge down
0.16 percent to 82.861. 
    Buoyant U.S. auto sales in August, partly driven by heavy
discounting, helped support platinum group metals (PGMs), with
the industry selling at an annualized pace not seen since early
2006. 
    Silver edged up 0.2 percent to $19.14 an ounce, and
platinum climbed 0.3 percent to $1,406.20 an ounce.
    
1406 EDT       LAST/    NET   PCT      LOW    HIGH   CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold DEC   1270.30   5.30   0.4  1261.90 1272.40   96,315
US Silver DEC  19.189  0.037   0.2   19.135  19.280   25,448
US Plat OCT   1412.50   3.60   0.3  1404.00 1414.70   10,171
US Pall DEC    875.95  -7.30  -0.8   870.05  888.30    6,276

Gold          1269.80   4.40   0.3  1261.70 1271.30         
Silver         19.140  0.040   0.2   19.110  19.240
Platinum      1406.20   4.40   0.3  1404.30 1412.00
Palladium      873.40  -4.70  -0.5   871.00  886.00

TOTAL MARKET              VOLUME           30-DAY ATM VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT    CHG
US Gold        108,301   126,016   157,306     13.25   -0.62
US Silver       26,852    58,882    53,016     17.61    1.02
US Platinum     10,933     9,018    11,731     13.71    0.98
US Palladium     6,360     9,892     6,109     18.78    0.40

 (Additional reporting by A. Ananthalakshmi in Singapore;
editing by Susan Thomas, Jane Baird, G Crosse and Gunna Dickson)

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