March 26, 2013 / 11:11 AM / in 6 years

PRECIOUS-Gold falls for 3rd day on euro calm, bright US data

* Encouraging US home, manufacturing data weigh on safe
havens
    * Bailout deal on Cypriot banking sector allays euro debt
fears
    * Russia, Turkey add gold to reserves in February
    * Coming up: U.S. February pending home sales Wednesday


    By Frank Tang
    NEW YORK, March 26 (Reuters) - Gold fell for the third
session in a row on Tuesday as the return of relative calm in
Europe after a deal to bailout Cyprus' banks eased market fears
and better U.S. factory and housing data pointed to an improving
economy.
    The metal came under pressure as Wall Street climbed after
data showed U.S. single-family home prices rose in January at
the fastest pace in more than six years. U.S. durable goods
orders showing demand for long-lasting manufactured products
also rose in February. 
    Trading volume was heavy for a second straight day as
investors digested the headlines out of Europe and longer-term
market repercussions after the Cyprus rescue plan. 
    "The Cyprus support is not there anymore and the U.S. data,
which on balance has been quite good today, is also being a drag
for the market," HSBC analyst James Steel said.
    Spot gold was down 0.4 percent at $1,598.30 an ounce
by 2:38 p.m. EST (1838 GMT).
    U.S. gold futures for April delivery settled down
$8.80 at $1,595.70 an ounce.
    Trading volume was about 65 percent above its 250-day
average, partly due to the April-June contract rollover and
increased market volatility on renewed euro worries.
    Bullion prices, however, were on track for their first
monthly gain - up around one percent so far in March - after
posting declines in every month since October. Hopes of
prolonged Federal Reserve stimulus and resurgent euro-zone debt
fears boosted gold's safe-haven appeal.
    The European Central Bank on Tuesday sought to quash
suggestions that the plan agreed between Cyprus and the European
Union could shape future bank rescues in the bloc, insisting
Cyprus was a unique case. 
    Gold had pared losses on Monday after the head of Eurogroup
said the Cyprus bailout, which involves imposing hefty levies on
some Cypriot bank deposits, represented a new template for
resolving euro zone banking problems in the future.
 
    "Gold is finding it difficult to take its cue from other
markets where sentiment remains confused at best in light of the
European situation and Cyprus rescue plan," TD Bank precious
metals strategists said in a note.

    CENBANK INTEREST REMAINS, BEARISH FORECASTS
    Underpinning gold prices was news that Russia increased its
gold holdings for the fourth straight month in February, and a
number of central banks in emerging economies also added gold to
their official reserve, underscoring central banks' appetite for
gold. 
    CPM Group, a commodities research and consultant, said in a
report Tuesday that the average price of gold is expected to
fall in 2013 for the first time in 11 years as fading fears of
catastrophic market events prompt investors to scale back
bullion purchases.
    The bearish call by CPM Group echoes those from top bullion
banks which have recently slashed their gold forecasts, citing
an improving U.S. economic outlook and a possible end to the
Federal Reserve's bond-buying program. 
    Among other precious metals, silver fell 0.2 percent
to $28.75. Platinum was down 0.3 percent to $1,572.99,
while palladium climbed 0.7 percent to $760.50.
    
 2:38 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1595.70  -8.80  -0.5  1593.40 1605.00  156,600
 US Silver MAY  28.679 -0.136  -0.5   28.605  28.845   21,096
 US Plat APR   1566.00 -16.90  -1.1  1559.20 1587.50   13,028
 US Pall JUN    761.40   4.05   0.5   754.30  764.70    1,911
                                                               
 Gold          1598.30  -6.60  -0.4  1595.23 1605.66         
 Silver         28.750 -0.060  -0.2   28.660  28.860
 Platinum      1572.99  -5.01  -0.3  1562.50 1583.75
 Palladium      760.50   5.50   0.7   757.27  761.14
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        291,269   196,681   174,830     12.33   -0.59
 US Silver       24,115    58,880    52,160     19.88    0.78
 US Platinum     28,019    15,019    11,152     14.99   -0.48
 US Palladium     1,926     7,922     5,244
0 : 0
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