August 1, 2013 / 10:08 AM / in 4 years

PRECIOUS-Gold falls as ECB rate view, strong US data boost dollar

* ECB's low-rate pledge, strong U.S. data lift dollar
    * Outflows from main physical gold fund appears easing
    * Top gold miners say falling bullion prices hurt results
    * Volume light as traders await Friday's job report

 (Adds details on technicals, gold miners' performance, updates
prices)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Aug 1 (Reuters) - Gold fell on Thursday,
its fourth consecutive daily drop, hit by strong U.S. factory
data and a dollar rally after the European Central Bank chief
said euro-zone interest rates will remain low for an extended
period of time.
    Some traders stayed on the sidelines ahead of Friday's
important U.S. nonfarm payrolls data, which could shed more
light on the Federal Reserve's planned tapering of monetary
stimulus. Economists expect payrolls to rise by 184,000 in July,
pushing the jobless rate near its lowest level in more than four
years. 
    The metal, which is denominated in U.S. dollars, fell as the
dollar index jumped 1 percent after ECB President Mario
Draghi said the central bank expects key interest rates to
remain at a record low 0.5 percent or lower levels for "an
extended period of time." 
    On Thursday, the U.S. Federal Reserve ended a policy meeting
without any sign that its $85 billion monthly bond-buying
program would end soon. But strong economic data
supported the view among investors that the Fed will start
reducing stimulus later this year. 
    "It is a question of when, not if, with the Fed, and
persistently strong numbers will only add more pressure on the
Fed to act, at least to reduce the monthly purchases," Andrey
Kryuchenkov, an analyst at VTB Capital said.
    Spot gold was down 0.8 percent at $1,311.50 an ounce
by 3:13 p.m. EDT (1913 GMT). Bullion is now testing its 20-day
moving average support at above $1,304, and will likely face
overhead resistance at $1,326 near its 50-day average, analysts
said.
    U.S. gold futures for December delivery settled down
$1.80 at $1,311.20, with trading volume about 25 percent below
its 30-day average, preliminary Reuters data showed.
    A more than one-percent gain in U.S. equities also weighed
on gold's appeal as an investment hedge, with benchmark S&P 500
index rising to an all-time high above 1,700 for the
first time ever.  
    Rising U.S. Treasury yield, seen as a gauge of U.S.
short-term interest rates, also heavily pressured gold, analysts
said. 
    Gold's 22 percent drop year to date is hurting the
profitability of gold miners. The world's No. 1 gold producer
Barrick Gold posted an $8.7 billion writedown and cut
its dividend by 75 percent on falling gold price, while Kinross
Gold reported a quarterly loss and suspended its
semi-annual dividend altogether.  
   
    ETF HOLDINGS STEADY
    On a more positive note for gold, holdings of the world's
largest bullion-backed exchange-traded fund, SPDR Gold Shares
, were unchanged for a fifth day on Wednesday. 
    Gold ETFs have recorded outflows of nearly 600 tonnes of
metal this year, helping push prices down more than 20 percent.
    In top buyer India, gold imports have come to a halt due to
uncertainty in import policy, keeping premiums high at around
$45 an ounce over London prices, dealers said. 
    Among other precious metals, silver was down 0.8
percent at $19.65 an ounce. Platinum gained 0.4 percent
to $1,439.25 an ounce, while palladium climbed 0.6
percent to $730.22 an ounce.
    Platinum group metals investors are digesting news General
Motors Co, Ford Motor Co and Chrysler Group LLC all
reported disappointing U.S. auto sales in July on low inventory
of some popular car models. 
 3:13 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1311.20  -1.80  -0.1  1307.10 1330.70  146,263
 US Silver SEP  19.624 -0.004   0.0   19.510  19.955   35,839
 US Plat OCT   1443.80  14.50   1.0  1433.80 1445.90    7,311
 US Pall SEP    731.85   5.50   0.8   726.60  738.00    2,385
                                                               
 Gold          1311.50 -10.99  -0.8  1308.63 1330.66         
 Silver         19.650 -0.150  -0.8   19.590  19.980
 Platinum      1439.25   5.25   0.4  1435.00 1442.25
 Palladium      730.22   4.22   0.6   729.77  735.22
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        159,011   221,773   186,710     24.09   -3.96
 US Silver       38,572    58,745    55,353     31.34    0.94
 US Platinum      7,450    14,274    12,513     23.42    0.00
 US Palladium     2,766     4,288     5,350                  
                                                               
 
 (Additional reporting by A. Ananthalakshmi; editing by Keiron
Henderson, Jane Merriman and David Gregorio)

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