March 21, 2012 / 12:05 PM / 6 years ago

PRECIOUS-Gold up but outlook weak as fund interest fades

* Investors more negative toward gold; ETF holdings fall
    * UK's Osborne says to up overall reserves, not gold
    * Silver could fall further, near-term support broken
    * Coming up: U.S. weekly initial jobless claims Thursday

 (Updates market activity, adds details, graphic link)	
    By Frank Tang and Amanda Cooper	
    NEW YORK/LONDON, March 21 (Reuters) - Gold rose slightly on
Wednesday as short-covering helped the metal recover some of the
previous session's losses, but waning interest from investment
funds and an improving U.S. economic outlook impeded gains.	
    Bullion failed to hold early gains as investor appetite was
lackluster based on a slightly higher dollar index and a flat
U.S. equities market after U.S. existing home sales data showed
the housing market recovery remained on track. 	
    Gold buying sentiment weakened after data showed holdings of
gold in the world's largest gold exchange-traded funds posted
its biggest one-day decline in three months. That reflected some
of the investor shift away from bullion.	
    "There seems to be less sponsorship from funds and less
speculative interest in the market. The European sovereign debt
situation is quiet at the moment and U.S. economic data is
decent," said Bill O'Neill, partner of commodities investment
firm LOGIC Advisors.	
    Spot gold was up 0.2 percent at $1,652.84 by 2:24
p.m. EST (1824 GMT).	
    U.S. gold futures for April delivery settled up $3.30
at $1,650.30 an ounce, with trading volume 20 percent below its
30-day average, preliminary Reuters data showed.	
    Gold fell 3 percent last week, removing the gains in January
that were based on expectations of further U.S. monetary easing,
as the Federal Reserve has offered few clues on any further
    The metal has now fallen almost $150 an ounce from a Feb. 29
peak of $1,790, driven by growing confidence that the U.S.
economy is poised for a recovery and that Greece has averted a
chaotic default.	
    "For me, the market is starting to look at conditions as
being more normal. Obviously, the evidence is the equity markets
in particular and the S&P 500 ... and the fact that we are in a
bit of a pause on monetary policy," Deutsche Bank analyst Daniel
Brebner said.	
    Gold prices received a slight boost after British finance
minister George Osborne said that he planned to increase
Britain's reserves. However, they retreated after a UK Treasury
spokesman said there were no plans to raise the gold holdings.
    Gold buying sentiment took a toll after U.S. CFTC data
showed money managers, including hedge funds and other large
speculators, trimmed their bullish bets last week to the lowest
level since the final week of January. 	
    O'Neill said his firm recently sold all its gold position
due to near-term volatilities, even though he is bullish in the
long run due to lingering economic uncertainties. 	
    The decline this month in the gold price has prompted one or
more central banks to buy as much as four tonnes of bullion in
recent weeks, although more exact figures will likely not be
available until the International Monetary Fund releases monthly
reserves data in the coming week or two.	
    Also a strike by a majority of jewelers throughout India
over the government's plan to raise the import duty on gold has
crimped demand this week in the world's largest consumer.	
    Silver was up 0.3 percent at $32.20 an ounce.	
    Barclays analysts said in a note that silver could fall
toward its recent lows of $31.60 an ounce after breaking a
near-term support of $32.10 on hourly chart earlier this week.	
    Palladium fell after data that showed February
imports into China, the world's largest consumer of commodities,
fell to their lowest since December 2009. 	
    Spot palladium was down 0.7 percent on the day at $683.97 an
ounce, while platinum fell 0.5 percent to $1,639.50 an
 2:24 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1650.30   3.30   0.2  1646.30 1661.90  127,380
 US Silver MAY  32.227  0.393   1.2   31.865  32.410   34,254
 US Plat APR   1640.40 -13.90  -0.8  1635.50 1664.50    8,161
 US Pall JUN    688.65  -8.40  -1.2   683.80  701.30    2,938
 Gold          1652.84   2.81   0.2  1647.05 1661.04         
 Silver         32.200  0.090   0.3   31.900  32.370
 Platinum      1639.50  -8.53  -0.5  1638.50 1672.00
 Palladium      683.97  -5.08  -0.7   686.00  698.50
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        149,186   185,602   195,338     18.35   -0.78
 US Silver       37,644    67,760    73,402     31.31    1.75
 US Platinum     11,414     8,622     8,293     26.84    2.42
 US Palladium     2,958     4,971     4,542                  
 (Additional reporting by Rujun Shen in Singapore; Editing by
Bob Burgdorfer)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below