December 2, 2019 / 12:01 PM / 4 days ago

PRECIOUS-Gold slips on strong Chinese data, palladium soars to new record

 (Adds quotes, details, updates prices)
    * Palladium up 46% for the year
    * Silver, platinum slip about 1%
    * China factory activity expands at quickest pace in 3 years
    * U.S. ISM manufacturing PMI data due at 1500 GMT

    By Diptendu Lahiri
    Dec 2 (Reuters) - Gold prices fell on Monday after
better-than-expected manufacturing data from China assuaged
fears of a slowdown in global growth while deficit-ridden
autocatalyst metal palladium soared to an all-time high.
    Spot gold        slipped 0.4% to $1,457.96 per ounce by 1310
GMT. U.S. gold futures         fell 0.6% to $1,463.80 per ounce.
    Data showing growth in factory activity during November in
China, the world's second-largest economy and biggest gold
consumer, pushed up equity markets.                  
            
    "At least in the short-term, this kind of data will keep
gold prices in check," said Julius Baer analyst Carsten Menke.
    Gold is considered a safe store of value at times of
political or economic uncertainty.
    Demand for the metal was further pressured by the rising
dollar, making dollar-denominated bullion more expensive for
buyers using other currencies.       
    On the U.S.-China trade front, reports said a preliminary
agreement has now stalled because of U.S. legislation supporting
protesters in Hong Kong and Chinese demands that Washington roll
back its tariffs.                          
    Gold has risen more than 13% this year mainly due to the
trade dispute driving demand for safe assets.    
    "Nothing particularly has really changed (on the trade
front) from last week, the market remains in the dark about how
things will progress. Investor appetite for gold is just waning
a little bit on lack of direction," ANZ analyst Daniel Hynes
said.
    Pointing to lingering growth concerns, euro zone
manufacturing activity contracted for a 10th straight month in
November, IHS Markit's final manufacturing Purchasing Managers'
Index (PMI) showed.
    Gold could move up in the medium to longer term as fears of
a slowdown still exist, Julius Baer's Menke added. 
    Investors now await manufacturing data from the U.S. later
in the day.
    Palladium        was up 0.7% at $1,853.21 an ounce, having
surged to an all-time high of $1,854.40. The metal has risen
about 46% this year.
    
    "The rising prices for the scarcity-hit metal have attracted
a lot of carmakers who are getting cold feet. These people have
taken forward positions in anticipation that prices will go even
higher in the future," said Commerzbank analyst Eugen Weinberg. 
    Tightening emissions regulations are putting more palladium
– chiefly used in vehicle exhausts to reduce harmful emissions
–in each vehicle, supporting consumption even as weakening
global growth hits vehicle sales.
    Elsewhere, silver        fell 0.7% to $16.90 per ounce,
platinum        was down 1.03% at $890.72 per ounce.

    
 (Reporting by Diptendu Lahiri in Bengaluru, editing by Ed
Osmond and Emelia Sithole-Matarise)
  
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