August 30, 2012 / 10:28 AM / 5 years ago

PRECIOUS-Gold eases as US equities down, eyes on Bernanke

* Markets poised for Fed clues on quantitative easing
    * Gold ETF head for strongest monthly inflow since November
    * Silver hits most expensive versus gold since May

 (New details throughout, updates comment, changes byline,
dateline pvs LONDON)
    By Frank Tang
    NEW YORK, Aug 30 (Reuters) - Gold eased on Thursday as
weakness from outside markets prompted bullion investors to take
profits ahead of a hotly awaited speech by U.S. Federal Reserve
Chairman Ben Bernanke.
    The metal tracked declines on Wall Street and U.S. crude
futures as investors closed out positions awaiting Bernanke's
speech at Friday's annual symposium of central bankers and
finance ministers in Jackson Hole, Wyoming.  
    Despite Thursday's dip, gold has gained 3 percent in the
last eight sessions on expectations that Bernanke could use his
speech to send a strong message to markets. 
    Some traders are expecting Bernanke might hint at a possible
third round of U.S. bond-buyback, known as quantitative easing,
while others said the Fed could wait for next week's nonfarm
payroll report before reaching a decision on stimulus at its
September policy meeting on Sept. 12-13.
    "It's not surprising for the metal to have a bit retracement
and consolidation here given the size of the rally and the
unlikelihood of further stimulus at Jackson Hole," said David
Meger, director of metals trading at Vision Financial Markets.
    Spot gold was down 63 cents at $1,655.31 an ounce by
11:35 a.m. EDT (1535 GMT).
    U.S. gold futures for December delivery were down
$4.90 an ounce at $1,658.10, with trading volume on track to
finish sharply below average, preliminary Reuters data showed.
    Silver dropped 0.8 percent to $30.44 an ounce.
    Last week, gold broke above the upper end of a four-month
trading range to over $1,640 an ounce, after the minutes of the
Fed's latest policy meeting revealed the central bank intended
to adopt gold-friendly stimulus soon unless economic conditions
improve dramatically.
    However, some analysts said that stimulus were not warranted
given current economic conditions. Data showed that U.S.
consumer spending rose by the most in five months in July, while
the Fed's Beige Book report showed that retail activity,
including auto sales, had picked up since the last report.
    Some analysts said gold, along with other assets, could be
vulnerable to a correction if Bernanke disappoints.
    Citigroup analyst David Wilson said U.S. stock market
hovering near a four-year high and better-than-expected U.S.
economic data suggested the Fed could refrain from action ahead
of a U.S. presidential and federal election in November.

    Inflows into gold exchange-traded funds have risen sharply
this month, with holdings of the largest, New York's SPDR Gold
Trust up nearly 38 tonnes so far this month, their largest
monthly inflow since November.
    The precious metal rallied to a 4-1/2 month high on Monday
as on Fed stimulus hopes, but it has failed to sustain those
    Among platinum group metals, spot platinum was up 0.1
percent at $1,512.49 an ounce, while spot palladium fell
0.5 percent to $624.90 an ounce.
    Supply worries underpinned platinum prices as South Africa's
Lonmin, the world's third-largest producer of the metal, has had
its mining operations shut for almost three weeks, as a wave of
violence stemming from a union turf war killed 44 people.

 Prices at 11:35 a.m. EDT (1534 GMT)                           
                               LAST      NET    PCT     YTD
                                         CHG    CHG     CHG
 US gold                    1658.10    -4.90  -0.3%    5.8%
 US silver                   30.430   -0.407  -1.3%    9.0%
 US platinum                1517.40    -2.90  -0.2%    8.4%
 US palladium                627.80    -7.05  -1.1%   -4.3%
 Gold                       1655.31    -0.63   0.0%    5.9%
 Silver                       30.44    -0.24  -0.8%    9.9%
 Platinum                   1512.49     1.99   0.1%    8.6%
 Palladium                   624.90    -3.00  -0.5%   -4.2%
 Gold Fix                   1660.50     3.50   0.2%    5.5%
 Silver Fix                   30.66    -7.00  -0.2%    8.8%
 Platinum Fix               1522.00     2.00   0.1%   10.2%
 Palladium Fix               634.00     1.00   0.2%   -0.3%
 (Additional reporting by Jan Harvey in London, Lewa Pardomuan
in Singapore; Editing by Marguerita Choy)
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