Gold settles down at $1,668 on eu bank worries

Gold settled down at $1,668 on Thursday, as disappointing economic data from China and weaker U.S. equity markets, driven by bank worries, dampened buying sentiment across the board.

Bullion took the lead of weaker U.S. stocks and commodities as lower-than-expected Chinese exports renewed fears of a global economic slowdown. Wall Street is on track to snap three days of gains on lower earnings by JPMorgan [JPM 31.60 -1.60 (-4.82%) ].
Trading has been thin all week, indicating a lack of commitment from bullion investors.
Silver [XAG= 31.68 -0.07 (-0.22%) ] fell 2.5 percent to $31.71 an ounce, declining in tandem with the base metal complex led by copper.
Spot gold [XAU= 1665.95 -0.25 (-0.01%) ] was last down 0.6 percent at $1,665.25 an ounce, having come off an overnight high at $1,683.89. Gold futures for December delivery [GCCV1 1668.60 0.10 (+0.01%) ] fell $14.10 to settle at $1,668.50 an ounce.
Bullion once again traded below its 20-day moving average after breaching that resistance the previous day. Analysts said technical selling could continue after gold briefly rose to records above $1,900 an ounce twice in late August and early September.
“Just the double top is enough to push the market down,” said Adam Hewison, president of MarketClub.com. “I think that gold already topped out for the year, and it is likely to be moving sideways in a broad trading range similar to a pattern early this year.”
Gold also came under pressure after new U.S. claims for jobless benefits were little changed last week and the trade deficit narrowed marginally in August, indicating a modest improvement in the economy.
In Sync with Riskier Assets
The metal, however, is on track for a rise of more than 1 percent this week, its strongest weekly performance in over a month.
Following a sharp correction from its record set in early September, gold has moved in tandem with the so-called risk assets such as equities and commodities, despite having had an inverse relationship with them earlier in the year, as buyers sought the metal as a safe haven.
Gold prices are also being underpinned by strong physical demand from jewelers and other consumers in Asia, where premiums are at their highest since the start of the year, indicating regional supply tightness.
However, French bank BNP Paribas cut its gold price forecasts for 2011 through 2013, following the recent pullback in prices, and said a near-term correction may be possible due to potential extreme risk aversion.
Among platinum group metals, palladium [XPD= 592.00 2.12 (+0.36%) , of which China is a key consumer for its the auto industry, fell 2.6 percent to $588.60.
Palladium, which virtually doubled in price last year due to demand from China's fast-growing car market, has lost more than a quarter of its value this year, having fallen to its lowest level in 25 months this October.
Platinum [XPT= 1527.99 0.26 (+0.02%) ] dropped 0.9 percent to $1,528.50.

Source Reuters

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Posted by VBN on Oct 14 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry