May 17, 2016 / 10:25 AM / 3 years ago

PRECIOUS-Gold down after U.S. data, stock market recovery curbs investor interest

* Paulson cut gold bets into SPDR fund while Soros rushes
back
    * U.S. inflation data (CPI) posts largest gain in 3 years
    * Platinum/palladium ratio: link.reuters.com/fyg99v

 (Updates price, adds comment)
    By Clara Denina 
    LONDON, May 17 (Reuters) - Gold edged lower on Tuesday,
after better-than-expected U.S. data and gains in European stock
markets which reduced the appeal of the precious metal often
perceived as a refuge from riskier assets.
    Spot gold fell 0.1 percent to $1,272.31 per ounce by
1340 GMT, while U.S. gold futures were also down 0.1
percent at $1,273.40.
    "There is a little profit taking in gold because the shares
market is higher," Societe Generale analyst Robin Bhar said. 
    European shares hit a two-week high on Tuesday, bolstered by
mining firms which tracked a rally in industrial metals, while
the dollar was down 0.1 percent against a basket of six major
currencies. 
    A weaker U.S. currency makes dollar-denominated gold cheaper
for holders of other currencies, while strong stock markets
reduce gold's attraction as a safe haven.
    Data on Tuesday showed U.S. consumer prices recorded their
biggest increase in more than three years in April, pointing to
a steady inflation build-up that could give the Federal Reserve
ammunition to raise interest rates later this year.
    "Everyone is really waiting to see whether the U.S. economy
does pick up in Q2, as it often does, and the narrative over the
Fed shifts again," Macquarie analyst Matthew Turner said.
    Gold has rallied 20 percent this year on speculation the
U.S. Federal Reserve has slowed its expected pace of rate
increases on concerns about the volatility of global markets.
    The Fed should consider raising rates at its June meeting,
Richmond Fed President Jeffrey Lacker told the Washington Post
in an interview published on Monday, saying inflation was moving
towards 2 percent and labour markets had tightened. 
    U.S. regulatory filings on Monday showed some influential
investors, including billionaire financier George Soros, bought
into gold through exchange-traded funds in the first quarter.
 
    Soros, who once called gold "the ultimate bubble", returned
to the world's biggest gold exchanged-traded fund (ETFs) after a
three year absence, buying 1.05 million shares in SPDR Gold
Trust worth about $123.5 million. 
    SPDR Gold Trust's assets have been rising steadily this year
and are at their highest since November 2013. 
    But long-time gold bull John Paulson cut his bets on
bullion. 
    Spot silver was unchanged at $17.14 per ounce, spot
platinum was down 0.2 percent at $1,041.50 per ounce and
spot palladium lost 1.3 percent to touch $582.70 an
ounce.
    The platinum/palladium ratio has reached its highest in
about a month this week, as it resumes its slow climb higher
after reaching its lowest since 2002 in October.
    An ounce of platinum now buys 1.78 ounces of palladium, up
from 1.64 ounces at the start of the year.

 (Additional reporting by Koustav Samanta and Vijaykumar Vedala
in Bengaluru and Jan Harvey in London; editing by Jane Merriman
and David Clarke)
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