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PRECIOUS-Gold dragged down by weak euro on political uncertainty
May 8, 2012 / 4:32 AM / 6 years ago

PRECIOUS-Gold dragged down by weak euro on political uncertainty

* Gold sentiment sluggish on political uncertainty in Europe
    * Spot gold neutral in $1,626.50-$1,646.86 range -
technicals
    * Coming up: U.S. retail sales, weekly; 1255 GMT

 (Updates prices)	
    By Rujun Shen	
    SINGAPORE, May 8 (Reuters) - Gold edged lower on Tuesday as
a backlash by voters in Greece and France against austerity
measures weighed on the euro, although prices were supported by
bargain hunters lurking around the lower end of the metal's
recent range.	
    The euro inched down, extending losses from the previous
session after elections in France and Greece cast doubt on the
political will and commitment to austerity measures seen crucial
to tackling the euro zone debt crisis.  	
    Gold has been taking cues from the currency market, and its
safe haven status was overtaken by the dollar, U.S. Treasuries
and German Bund during the political upheavals in
Europe. 	
    "The sentiment in gold is likely to remain weak for a while,
after the changes in European governments again triggered
worries about the bloc's debt crisis and pressure the euro,"
said Li Ning, an analyst at Shanghai CIFCO Futures.	
    The decline in oil prices, which have lost nearly 7
percent so far this month, eased concerns on inflation and
stripped away some of gold's attraction as a hedge against
rising prices, she added.	
    Spot gold edged down 0.2 percent to $1,634.91 an
ounce by 0625 GMT. U.S. gold also lost 0.2 percent to
$1,635.40.	
 	
    Gold has been trading between $1,620 and $1,680 for about a
month, capped by an unfavourable macroeconomic environment,
while investors are waiting for bargains at the lower end.	
    "We see a small amount of physical buying on the downside,
and probably more buyers will emerge if prices drop to the
$1,600 level," said a Hong Kong-based dealer.	
    Gold imports by India, the world's biggest buyer of bullion,
could rise on pent-up demand from jewellers after the federal
government decided to scrap an excise duty on jewellery it
imposed in March, the head of a trade body said on Monday. 
 	
    "However, the doubling of the import duty (to 4 percent)
remains - and together with a weak INR (Indian rupee), the pent
up demand market participants are expecting, may still
disappoint," said ANZ in a research note.	
    Hong Kong's gold exports to China in March rose nearly 59
percent on the month to the third-highest level on record, while
the gold flow from China surged to the most in at least two
years. 	
    Spot platinum inched up 0.3 percent to $1,526.19,
rebounding from $1,507.25 hit in the previous session, the
lowest in more than three months.	
    	
    Precious metals prices 0625 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1634.91   -3.19   -0.19      4.55
  Spot Silver        29.85   -0.16   -0.53      7.80
  Spot Platinum    1526.19    4.39   +0.29      9.56
  Spot Palladium    647.70    5.82   +0.91     -0.74
  COMEX GOLD JUN2  1635.40   -3.70   -0.23      4.38         9145
  COMEX SILVER JUL2  29.87   -0.26   -0.85      6.99         1677
  Euro/Dollar       1.3023
  Dollar/Yen         79.96
  COMEX gold and silver contracts show the most active months  
 	
 (Editing by Richard Pullin)

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