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PRECIOUS-Gold up on weaker dollar, headed for 3rd weekly gain
July 26, 2013 / 3:11 AM / 4 years ago

PRECIOUS-Gold up on weaker dollar, headed for 3rd weekly gain

* Gold up nearly 10 pct in three weeks
    * Dollar languishes at 1-month lows 

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, July 26 (Reuters) - Gold edged higher on Friday,
staying on track for its third straight weekly gain, helped by a
weaker dollar and hopes of a prolonged period of easy monetary
policy.
    Bullion has gained nearly 10 percent in three weeks - its
biggest such winning streak in nearly two years - after the
Federal Reserve assured financial markets it would only start
phasing out its stimulus when it was sure the U.S. economy was
strong enough to stand on its own.
    Spot gold had climbed 0.1 percent to $1,334.90 an
ounce by 0652 GMT, nearly $160 more than the three-year low hit
on June 28.
    "The mood towards gold has definitely changed in recent
weeks as the market thinks most of the bad news is priced into
gold already," said Danny Laidler, head of ETF Securities'
Australia and New Zealand business. 
    "I wouldn't say people are bullish gold but they are
definitely less bearish," said Laidler, adding that outflows
from the firm's gold-backed exchange traded fund (ETF) have
slowed.
    Gold has still lost a fifth of its value this year as
investors feared a strong recovery in the United States might
prompt the Fed to scale back its $85 billion monthly bond
purchases. Outflows from gold ETFs have also weighed on prices.
    Holdings of SPDR Gold Trust, the world's largest gold
ETF, fell 0.3 percent to 927.36 tonnes on Thursday - their
lowest in four years. 
    "The fundamentals for buying gold are still there - loose
monetary policy, concerns over the Middle East and Europe, and
(economic) data from the U.S. and China not being as positive as
expected," Laidler said. 
    
    CHINA DEMAND
    Physical demand in China has been key to supporting gold
prices this year amid the exit from ETFs.
    Data from the Shanghai Gold Exchange shows that physical
deliveries have totalled 1,198.4 tonnes so far this year. The
exchange delivered 1,140 tonnes in all of 2012. 
    China's gold demand could hit a record 1,000 tonnes this
year, the World Gold Council said on Thursday, which means it
would overtake India as the world's biggest bullion consumer.
 
    India is seeing a slowdown in demand as the government
tightens rules to curb gold imports and tame a record trade
deficit. Premiums in India jumped to $20 an ounce over London
spot prices on Thursday due to short supplies. 
    Premiums in other parts of Asia remained stable from last
week. 
    
  Precious metals prices 0652 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1334.90    1.86   +0.14    -20.28
  Spot Silver        20.15   -0.05   -0.25    -33.45
  Spot Platinum    1440.99   -5.01   -0.35     -6.12
  Spot Palladium    736.50   -0.50   -0.07      6.43
  COMEX GOLD AUG3  1334.50    5.70   +0.43    -20.37        19310
  COMEX SILVER SEP3  20.14   -0.02   -0.09    -33.56         4460
  Euro/Dollar       1.3276
  Dollar/Yen         98.86
 
  COMEX gold and silver contracts show the most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Tom Hogue)

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