July 9, 2012 / 4:36 AM / 7 years ago

PRECIOUS-Gold steady; market uncertain if Fed will ease policy

* Prices may remain rangebound, investors in wait-and-see
mode
    * China's June inflation cools, gives Beijing scope to ease
policy
    * Spot gold could fall to $1,540/oz - technicals
    * Coming up: U.S. CFTC commitment of traders, weekly; 1930
GMT

 (Writes through; updates prices)
    By Rujun Shen
    SINGAPORE, July 9 (Reuters) - Gold traded little changed on
Monday on a lack of conviction the U.S. Federal Reserve would
take measures to stimulate the economy anytime soon even after a
disappointing jobs report.
    U.S. non-farm payrolls increased by just 80,000 in June,
lower than a forecast of 90,000, raising pressure on the Fed to
do more to help the frail recovery. 
    "The market is not sure where prices should go and the
sentiment is fragile," said Lynette Tan, an analyst at Phillip
Futures, adding that prices are likely to remain rangebound for
the time being with investors stuck in data-watching mode. 
    Though June's payrolls increase fell short of expectations,
it still exceeded the May number and could be seen as a slight
improvement, putting a damper on hopes for a third round of
quantitative easing from the Fed, Tan added.
    On June 1, gold jumped 4 percent at a surprisingly weak
employment report which fuelled talks of further monetary easing
from the Fed. The central bank's stance on easing has played a
major role in the gold market this year.
    Spot gold dropped to its lowest in almost two weeks
of $1,575.89 an ounce -- around its 61.8 percent retracement
level on a rally in late June triggered by a euro zone deal,
before paring most losses to trade at $1,581.70 by 0643 GMT.
    However, Reuters market analyst Wang Tao expects spot gold
to fall to $1,540 an ounce during the day. 
    U.S. gold futures contract for August delivery edged
up 0.2 percent to $1,581.90.
    
    The dollar and Treasuries trumped gold as top destinations
for the flight to safety, as investors fretted about the global
economic outlook with euro zone fighting its debt crisis and
China showing signs of an economic slowdown.  
    Asia's two biggest exporters, China and Japan, showed
further signs of slowing down in data published on Monday,
signalling risks of a fresh slide in global demand.
  
    In the United States, while the latest weak jobs data has
raised the chance in favour of the Fed launching a new round of
monetary stimulus to 65 percent from 50 percent in late June,
Wall Street economists polled by Reuters mostly expect it to
happen only by the year-end. 
    Asia's physical gold market has been sluggish for a while,
as the rangebound prices have done little to excite investors.
    "India is not even responding to the stronger rupee," said a
Singapore-based trader. "Physical supply seems high and scrap is
coming into the market."
    Hedge funds have also moved to the sidelines of the market
as volatility has been on the decline since early June,
he added.    
    Precious metals prices 0643 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1581.70   -0.80   -0.05      1.14
  Spot Silver        27.16    0.09   +0.33     -1.91
  Spot Platinum    1439.25    1.12   +0.08      3.32
  Spot Palladium    576.05    3.15   +0.55    -11.72
  COMEX GOLD AUG2  1581.90    3.00   +0.19      0.96        12552
  COMEX SILVER SEP2  27.15    0.23   +0.85     -2.74         3328
  Euro/Dollar       1.2290
  Dollar/Yen         79.65
  COMEX gold and silver contracts show the most active months
 
 (Editing by Himani Sarkar)
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