October 1, 2014 / 12:52 AM / 3 years ago

PRECIOUS-Gold struggles near 9-month low on stronger dollar

SINGAPORE, Oct 1 (Reuters) - Gold extended losses on
Wednesday to trade near a nine-month low and looked likely to
break below the key $1,200-an-ounce level as the dollar gained
in strength.
    The absence of top buyer China, which begins a week long
holiday from Wednesday, is also likely to add pressure.
    
    FUNDAMENTALS
    * Spot gold slipped 0.2 percent to $1,206.90 an ounce
by 0038 GMT, its fourth straight session of losses. The metal
had fallen to $1,204.40 in the previous session - its lowest
since early January.
    * The metal slid 6 percent in September, its sharpest
monthly drop since June 2013, and also logged its first
quarterly loss of the year.
    * Bullion and other precious metals have been weighed down
by the strength in the dollar, which is close to a four-year
peak against a basket of currencies. 
    * A stronger U.S. currency makes dollar-denominated precious
metals more expensive for holders of other currencies. 
    * Expectations of an earlier rate hike in the United States
have also clobbered gold, a non-interest-bearing asset. 
    * Reflecting waning investor sentiment, holdings in SPDR
Gold Trust, the top gold-backed exchange-traded fund, fell
2.39 tonnes to 769.86 tonnes on Tuesday - the lowest since
December 2008. 
    * Markets in top buyer China are closed for a week from
Wednesday for the National Day holiday. This weakens a key
support for gold during Asian trading hours, potentially pushing
the metal to drop below a key psychological level of $1,200 an
ounce.
    * Investors were also eyeing political unrest in Hong Kong
for its impact on equities, and possibility of safe-have bids
for gold.
    * Thousands of pro-democracy protesters thronged the streets
of Hong Kong early on Wednesday, ratcheting up pressure on the
pro-Beijing government that has called the action illegal and
vowed to press ahead with National Day celebrations.
 
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    MARKET NEWS
    * Asian shares got off on the back foot on Wednesday as
continued civil unrest in Hong Kong sapped confidence, while the
dollar index was in sight of a four-year high after marking its
best quarterly gain in six years. 
    
    DATA/EVENTS (GMT)
    0100 China Official manufacturing PMI Sep 
    0750 France Markit manufacturing PMI Sep 
    0755 Germany Markit/BME manufacturing PMI Sep 
    0800 Euro zone Markit manufacturing PMI Final Sep 
    1215 U.S. ADP national employment Sep 
    1345 U.S. Markit manufacturing PMI Final Sep 
    1400 U.S. ISM Manufacturing PMI Sep

    PRICES AT 0038 GMT    
 Metal            Last       Change    Pct chg
                                               
 Spot gold           1206.9     -1.84     -0.15
 Spot silver          16.91     -0.03     -0.18
 Spot platinum      1281.76    -11.34     -0.88
 Spot palladium      769.25      0.35      0.05
 Comex gold          1207.6        -4     -0.33
 Comex silver         16.92    -0.137      -0.8
 Euro                1.2623                    
 DXY                 85.953                    
                                               
 COMEX gold and silver contracts show the most
 active months
 
 (Reporting by A. Ananthalakshmi; Editing by Ed Davies)

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