Reuters logo
PRECIOUS-Gold snaps five-day decline as stock markets turn weaker
June 3, 2014 / 8:08 PM / 4 years ago

PRECIOUS-Gold snaps five-day decline as stock markets turn weaker

* Dollar down but near three-month high

* Chinese gold demand weak after holiday, premiums flat (Adds late trade in spot gold, close in gold futures)

By Barani Krishnan and Clara Denina

NEW YORK/LONDON, June 3 (Reuters) - Gold prices rose for the first time in six days on Tuesday as stock markets beat a retreat after a series of record highs on Wall Street.

New York-traded gold futures settled up while the spot price of bullion remained positive in late afternoon trade despite U.S. economic data showing a third straight month of gains for new factory orders, which should have been bullish for equities.

Even so, analysts and traders said the precious metal may still face a slog in the next session due to uncertainties ahead of Thursday’s European Central Bank policy meeting and a huge decline in investor interest in the futures market.

“The market’s trying hard to break out of its loss ... but it couldn’t have picked a worse time, given the unknowns from the ECB and after the tremendous loss of open interest from the option expiration, roll-over and first notice day in gold futures,” said George Gero, senior vice-president at RBC Wealth Management in New York.

By 3:45 p.m. EDT (1945 GMT), the spot price of bullion was a touch higher than Monday’s close, trading 0.1 percent up at $1,245.68 an ounce. It initially fell to a new four-month low of $1,240.61, threatening to extend the decline of the past five sessions, which marked longest losing streak in nearly seven months.

U.S. gold futures for August delivery settled up 0.4 percent, or 50 cents, at $1244.50 an ounce.

“The market is not finding any confidence at the moment, and you could even argue that now we have seen a couple of attempts to bounce but those have been very shallow, which leaves the risk that we could see further weakness in the market,” Saxo Bank senior manager Ole Hansen said.

U.S. stocks edged lower, receding from record levels. Global equities also slipped. The dollar index eased 0.1 percent, but remained near its highest since Feb. 13.

The ECB is expected to cut interest rates, as well as lower the rate banks are charged for depositing funds with the central bank to below zero, on Thursday.

Weak demand for physical gold in No. 1 market China, even after the end of Monday’s Dragon Boat festival, added to uncertainty, traders in Asia said.

Among other precious metals, platinum slid 0.3 percent to $1,425.53 an ounce. Palladium rose 0.7 percent to $834.80 an ounce amid news that striking mine employees in major producer South Africa were considering a government offer to end a five-month work stoppage. Silver climbed 0.4 percent to $18.78 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; Editing by Susan Thomas, Peter Galloway and Tom Brown)

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