November 11, 2013 / 11:31 AM / 6 years ago

PRECIOUS-Gold falls on strong Chinese data, Fed taper worries

* Prices hits lowest level since Oct. 17
    * Fed taper speculation leaves dollar near 2-week high
    * Physical demand fails to pick up despite lower prices


    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Nov 11 (Reuters) - Gold prices fell on
Monday to their lowest levels in nearly a month as signs of
steady Chinese economic growth fuelled worries about monetary
tightening there and extended the previous session's slide on
U.S. Federal Reserve tapering fears.
    Bullion prices fell after data showed China's annual
inflation climbed and as factory output and investment data
pointed to signs of stabilization in the world's second-largest
economy, fanning market worries about policy tightening, traders
said. 
    Gold fell for a third consecutive session. It posted its
biggest one-day fall in more than a month on Friday when
surprisingly strong U.S. jobs data for October indicated the Fed
could cut its bond-buying stimulus as early as December.
    "We are still trading under the threat of Fed tapering as a
response to Friday's nonfarm payroll data," said David Meger,
director of metals trading at futures brokerage Vision Financial
Markets.
    "The ongoing strength of the equities market continues to
take investment dollars away from the precious metals arena,"
Meger said. 
    Spot gold was down 0.5 percent at $1,282.56 an ounce
by 1:54 p.m. EST (1854 GMT), having earlier hit its lowest since
Oct. 17 at $1,278.94 an ounce in early trade.
    U.S. Comex gold futures for December settled down
$3.50 at $1,281.10 an ounce, with trading volume about 45
percent below its 250-day average, preliminary Reuters data
showed.
    U.S. stocks were little changed on Monday as the market took
a breather after its five-week winning streak. The S&P 500
equities index held within striking distance of a record
high. 
    
    PHYSICAL DEMAND STILL WEAK
    Gold's recent drop to below $1,300 has failed to attract
demand in Asia as buyers waiting on the sidelines expect prices
to weaken further, dealers said.
    Dealers in Hong Kong said there was no strong pickup in
demand, and premiums at the Shanghai Gold Exchange are now far
from the levels seen after April's record two-day $225 drop in
bullion prices. 
    In physical gold news, precious metals storage firm
Malca-Amit has opened a facility in the new Shanghai free trade
zone that can store up to 2,000 tonnes of gold, as it hopes to
benefit from continued strength in China's demand for bullion.
 
    On charts, gold's slide below $1,300 an ounce on Friday has
put the metal on track to retest its October low of $1,251. A
failure of support there could set up a break below June's
three-year low, analysts said. 
    Spot silver fell 0.4 percent to $21.37 an ounce.
Platinum dropped 0.7 percent to $1,428.99 an ounce, while
palladium fell 0.6 percent to $751.50 an ounce. 

 1:54 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1281.10  -3.50  -0.3  1278.10 1288.80   84,226
 US Silver DEC  21.282 -0.035  -0.2   21.230  21.450   24,683
 US Plat JAN   1432.40 -10.50  -0.7  1425.30 1446.30    7,228
 US Pall DEC    754.55  -3.35  -0.4   746.30  760.20    3,368
                                                              
 Gold          1282.56  -6.04  -0.5  1278.94 1288.46         
 Silver         21.370 -0.090  -0.4   21.270  21.460
 Platinum      1428.99  -9.51  -0.7  1428.50 1443.50
 Palladium      751.50  -4.47  -0.6   749.00  756.22
                                                              
 TOTAL MARKET              VOLUME   30-D ATM VOLATILITY
                CURRENT   250D AVG   CURRENT     CHG
 US Gold        105,630    189,283     23.18   -1.01
 US Silver       32,364     58,610     35.14    1.70
 US Platinum      7,337     12,978     20.36    0.00
 US Palladium     3,762     5,806
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