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PRECIOUS-Gold trades near 4-month low as stronger equities curb demand
June 3, 2014 / 3:27 AM / 3 years ago

PRECIOUS-Gold trades near 4-month low as stronger equities curb demand

* Gold steady after 5-day losing streak
    * Chinese demand weak over holiday, premiums unchanged

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, June 3 (Reuters) - Gold steadied on Tuesday after
a five-day losing streak but was still trading near its lowest
level in four months as stronger equities dented the metal's
investment-hedge appeal.
    Weak demand in top consumer China also weighed on investor
sentiment, with buying interest failing to come back strongly
after the Dragon Boat festival on Monday.
    Spot gold edged up 0.2 percent to $1,246.00 an ounce
by 0645 GMT. The five-day decline before Tuesday is the metal's
longest losing streak in nearly seven months.
    Asian shares edged higher, supported by strong global
economic data, while the dollar index hovered near its
highest since Feb. 13. 
    Gold is often seen as an investment alternative to riskier
assets such as stocks. 
    "Over the past week investors have turned more positive in
the outlook for the global economy and for a peaceful resolution
to the Ukrainian crisis, with more industrially sensitive
commodities like silver and nickel seeing strong inflows and
gold seeing outflows," ETF Securities said in an emailed note. 
    Gold-backed exchange-traded products run by the firm saw
outflows of $52 million last week - the biggest since March, it
said.
    Data on Monday showed that U.S. and China manufacturing
activity expanded in May, putting the world's two largest
economies on a seemingly firmer path to recovery, but a slowdown
in euro zone factory growth boosted expectations of policy
easing by the European Central Bank. 
    "We suspect that gold will likely push lower over the course
of June and we are looking at the $1,210 level as being the next
 support," INTL FCStone analyst Edward Meir said.
    
    CHINESE DEMAND
    Investors were hoping that Chinese demand would support
prices, expecting retailers and banks to be in the market again
for bullion after the Dragon Boat festival holiday. 
    However, prices for 99.99 percent purity gold on the
Shanghai Gold Exchange eased on Tuesday. Premiums
to the global benchmark failed to budge on Tuesday, remaining at
about $3 an ounce - the same level as Friday's.
    "There is no special interest from Shanghai today, in fact
we see some small liquidation," said a trader in Hong Kong.
"This indicates that consumer demand over the long weekend was
not good."
    Among other precious metals, platinum and palladium
 edged higher on Tuesday as wage strikes in major producer
South Africa dragged on for a fifth month.
    A South African labour court threw out an urgent application
on Monday by the AMCU union to stop platinum firms communicating
directly with miners, as both sides deliberated over government
proposals to end the strike. 

    PRICES AT 0645 GMT
 Metal           Last     Change  Pct chg
                                  
 Spot gold          1246       2     0.16
 Spot silver       18.82    0.11     0.59
 Spot platinum   1433.49    4.04     0.28
 Spot palladium   830.65     1.9     0.23
 Comex gold       1246.5     2.5      0.2
 Comex silver      18.84   0.101     0.54
 Euro             1.3601                 
 DXY              80.601                 
                                         
 COMEX gold and silver contracts show the
 most active months
 
 (Editing by Michael Perry and Muralikumar Anantharaman)

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