But gains were capped by a slight recovery in the U.S. dollar and by a reduction in the metal’s appeal as a haven.

Spot gold was bid at $954.40 an ounce at 1444 GMT, against $949.65 an ounce late in New York on Monday. U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $2.70 to $956.20.

The data from the Institute of Supply Managers showed the U.S. manufacturing sector returned to growth in August after a prolonged slump, while pending home sales raced to a two-year high in July.

The news boosted U.S. stock markets, while European shares pared earlier losses.

Simon Weeks, head of precious metals at the Bank of Nova Scotia, said the news was mixed for the gold market.

“On the one hand, it is weaker as people unwind safe haven positions and put risk on again, and on the other, it is high due to increased concerns over inflationary pressure,” he said.

“There is so much going on this week in terms of data, the ECB meeting and then the G20 that it will probably be next week before people have a clear understanding of how they want to position themselves,” he added.

Analysts said ahead of the data that a positive view of the economy could help ailing jewellery and industrial sales, which have proved a drag on prices in recent months. The dollar index <.DXY> was a touch firmer after the data.

Oil prices rose more than $1 a barrel, meanwhile, after the data boosted hopes for an economic recovery, while prices of industrial metals such as copper pared losses.

Gold demand in India, the world’s largest bullion market last year, abated as traders awaited further price falls. Some buying was seen after prices slipped below $950 an ounce, but this had not persisted, traders said.

IMPORTS FALL

India’s gold imports fell to 12-14 tonnes in August from 98 tonnes a year before as high prices and weak monsoon rains dented demand, the head of the Bombay Bullion Association said.

Gold imports to Turkey, one of the top three consumers of the metal, also fell 74 percent year-on-year to 12.517 tonnes, as demand in the local market weakened.

Among other precious metals, silver firmed to $14.95 an ounce against $14.89, while platinum was at $1,234 an ounce against $1,237 and palladium was at $289 against $288.50.

Palladium rose to a year high of $291.50 an ounce in earlier trade, helped by hopes demand for the autocatalyst material may recover and strength in other precious metals.

“Palladium… has the potential to test the $300-05 area, however we remain concerned about the level of speculative longs in the market,” said The BullionDesk.com analyst James Moore.

“(These) leave the metal vulnerable to a rapid correction should those longs become spooked.”

Talks between South Africa’s mine workers’ union and Impala Platinum began on Tuesday in an attempt to end a strike over wages. Platinum’s gains have been capped by weak demand from carmakers and the perception above-ground stocks are plentiful.

Sept 1 (Reuters)

This from Reuters, London:

Gold fell nearly 2 percent in Europe on Monday as investors took profits after recent gains, amid disappointment the metal had failed to beat resistance near $930 an ounce last week.

Spot gold slipped to $895.65/897.65 an ounce at 1446 GMT, down from $911.70 in New York late on Friday. Earlier it touched a low of $893.15.

U.S. gold futures for April delivery on the COMEX division of the New York Mercantile Exchange fell $16.30 to $897.60 an ounce.

“There has been some profit taking and disappointment we couldn’t break through $930, even with strong demand from ETFs,” said Commerzbank senior trader Michael Kempinski.

Signs of a recovery in equities, and hopes the Obama administration’s stimulus plan will boost U.S. growth, are taking the heat out of safe-haven buying for exchange-traded funds.

“Stocks had a good performance last week and Barclays had some nice figures today,” said Kempinski. “Probably the safe-haven buying argument is gone for the time being.”

Traders are awaiting an announcement on Washington’s massive stimulus plan and bank rescue package. The Senate was due to vote on the package later this session to clear the way for its passage on Tuesday.

SPDR Gold Trust (GLD), the world’s largest bullion-backed exchange traded fund, said its holdings were static on Friday after rising to a record on two successive days last week.

Gold continued to break its correlation with its main external drivers — oil and the dollar-euro exchange rate.

The dollar weakened against the euro, weighed down by uncertainty over the details of U.S. plans for massive fiscal stimulus, and a much-anticipated package to help banks. A weaker dollar usually benefits gold.

Gold also ignored rising oil prices, which are also typically supportive.

OUTPUT ROSE

The world’s third-largest gold miner, AngloGold Ashanti , said its output rose to 1.268 million ounces in the three months to end-December and said its cash costs at $422 an ounce showed a 13 percent improvement on the previous quarter.

The miner said it plans to keep trimming its hedgebook this year, using $900 an ounce as a guide price for the precious metal. The company reported a fourth-quarter headline loss of 5 cents per share, missing market expectations.

Silver slipped to $12.91/12.99 an ounce from $13.06. The white metal has benefited from technical buying as the gold-silver price ratio declines, analysts said.

“(Silver) continues to make back ground against gold as some investors look to cheaper alternatives to the yellow metal,” James Moore, an analyst at TheBullionDesk.com, said.

Platinum eased to $985/990 an ounce from $999.50. Precious metals consultancy Johnson Matthey said it expects platinum demand to fall 5 percent this year, and held its price forecast for the metal at $700-1,400 an ounce.

South African production will be slightly up, it said, due to new mines, despite the announced closures of some other facilities.

The world’s biggest platinum miner Anglo Platinum reported higher earnings but flagged up cost pressures as it cut its final dividend and said it may cut jobs if prices fall further.

The company, a unit of Anglo American , said it produced 2.39 million ounces of refined platinum last year, slightly below targets.

Spot palladium was at $206/210 against $210.

Palladium jumped 11 percent last week on the back of fund interest in the metal, which is seen as good value compared to platinum. The ZKB palladium ETF saw an inflow of more than 1 percent or 6,365 ounces last Thursday

LONDON, Feb 9 (Reuters)

U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange fell $10.30 an ounce to $898.50.

“One of the things that has really helped gold a lot has been the issues in the banking system,” Michael Widmer, an analyst at BNP Paribas, said.

“Looking at the newsflow over the last few days, there was a bit of relief after Barclays’ (BARC) announcement (on its performance),” he said. “That took away some of the immediate buying (of gold).”

On the currency markets, typically a key driver of gold, the euro ceded early gains after hitting a one-week high versus the dollar. However, this failed to pressure gold as it lifted from lows.

Gold typically moves in the opposite direction to the dollar, but its usual relationship with the currency has weakened, with both assets slipping earlier on Tuesday as risk aversion eased.

“A stronger dollar implies panic about the economic outlook but should mean a weaker gold price, in theory,” Daniel Smith, an analyst at Standard Chartered, said.

“The fact that that (relationship) has broken down highlights how worried people are about where they can put their money and who they can trust.”

A Reuters survey of 52 analysts published on Monday showed most expect gold to hold its ground in 2009 despite expected falls in other asset prices, on worries over the global economic outlook and turmoil in the financial markets.

Investment in physically backed products such as exchange-traded funds has been strong in recent weeks as investors seek a safe store of value.

Holdings of New York’s SPDR Gold Trust (GLD) inched up to a new record for the sixth consecutive session on Monday, and have climbed more than 52 tonnes since the beginning of the year.

London-based ETF Securities said its gold-backed ETFs saw inflows of 420,000 ounces last week.

SENSITIVE

However, gold jewelery demand remains weak, dealers say.

“As the demand for jewelery is very sensitive to price movements, demand for gold from India, Turkey and the Middle East, the main centres of the gold jewelery industry, should continue to weaken,” said Commerzbank.

Silver softened in line with gold to $11.98/12.06 an ounce from $12.04 an ounce late on Monday.

The Reuters survey showed most analysts expected silver prices to fare better than those of platinum and palladium, as risk aversion boosts its appeal as a safe haven.

The platinum group metals are also under pressure from gold’s fall. Both platinum and palladium suffered in recent months from fears over falling demand from carmakers, who account for around half of global consumption.

“Demand weakness is likely to weigh on the market in (the first half) and prices are likely to gain traction in line with a pick up in the economic growth towards the end of the year,” Barclays Capital said in a note.

South Africa-focused Aquarius Platinum (AQP) said it expects to report a first-half after-tax loss of $75-$85 million due to weak metals prices. Attributable production of PGMs rose 2.7 percent in December, it added.

Platinum edged down to $944.50/954.50 an ounce from $959.59, while palladium eased to $189/194 an ounce from $190.

LONDON, Jan 27 (Reuters)

Gold swung into the black on Tuesday, rising more than 2 percent to a one-week high of $855.75 an ounce, amid market talk of a large order.

Firm investment demand for gold as a haven from risk is fueling buying of the precious metal, analysts said.

Spot gold was quoted at $853.00/855.00 an ounce at 1228 GMT, up from $834.55 late on Monday. Earlier it touched a low of $822.90, down more than 1 percent.

Standard Chartered analyst Daniel Smith said strong investor flows into products such as exchange-traded funds as investors sought more secure assets were offsetting weaker jewelery demand.

“People are slowly building long positions in gold and commodities more generally,” he said.

Gold managed shrugged off early weakness linked to a strengthening U.S. dollar and weaker oil prices.

The dollar rose to a six-week high against the euro as traders worried about the outlook for the euro zone economy, after the European Commission issued a grim forecast for 2009 and Standard and Poor’s cut Spain’s debt ratings.

A stronger dollar tends to pressure gold, which is often bought as an alternative investment to the U.S. currency.

“With financial institutions struggling in Europe and euro zone government bond spreads widening, weak economic data could see the euro lose ground against the dollar,” noted Standard Bank analyst Walter de Wet.

In Germany, data showed the Mannheim-based ZEW economic think tank’s monthly poll of economic sentiment rose to -31.0 from -45.2 in December.

The other main external driver of gold, crude oil, tumbled almost 10 percent, after Russia and Ukraine agreed on a gas deal that will help secure supplies to Europe and as traders worried over the outlook for demand.

Gold tends to move in line with crude, as it is often used as a hedge against oil-led inflation. Moves in the oil price are also an indicator of interest in commodities as an asset class.

Markets are awaiting the inauguration of new U.S. president Barack Obama. Obama is due to take the oath of office at 1700 GMT.

JEWELERY DEMAND WEAK

Overall, fears over the outlook for the global economy and the financial system are boosting interest in products like exchange-traded funds — which issue securities backed by actual stocks of gold. These are seen as less risky than paper assets.

The world’s largest gold-backed ETF, New York’s SPDR Gold Trust, said its holdings are at a record 795.25 tonnes.

However, demand for consumer products such as gold jewellery is suffering from relatively high gold prices. Jewelery demand in the world’s largest bullion market, India, slowed on Tuesday as buyers waited for prices to fall.

Demand may pick up if prices move below 12,500 rupees locally and $800 on the international markets, Mayank Khemka, managing director of Khemka International in Delhi, said.

Among other precious metals, platinum weakened a touch to $942.50/947.50 an ounce, against $948.50 late on Monday.

Prices have remained in a relatively narrow range below $1,000 an ounce as traders continue to fret about the demand outlook as the economy slows.

Platinum has shed some 60 percent of its value since it hit an all-time high of $2,290 an ounce last March on fears over falling consumption by car makers, who account for around half of global demand for the metal.

Prospects for the economy, and the automotive sector in particular, “remain very worrying” for platinum, Societe Generale said in a weekly report.

Palladium was quoted at $181.50/186.50 an ounce against $183 late on Monday, while silver fell to $11.29/11.36 an ounce from $11.13.

LONDON, Jan 20 (Reuters)

Gold fell more than 2 percent on Tuesday as a stronger dollar dented the precious metal’s appeal as a currency hedge, but the platinum group metals rallied as investors hunted for bargains.

Spot gold was quoted at $846.50/848.10 an ounce at 1444 GMT, down from $858.90 late in New York on Monday. However, it lifted off an earlier low of $838.55 as the dollar trimmed gains against the euro after a raft of U.S. data at 1500 GMT.

U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange were down $10.10 at $847.70.

VM Group analyst Matthew Turner said investors were looking to the currency markets for direction. “A lot of news on physical demand has been quite poor, and that might also be weighing on prices,” he added.

The U.S. currency rose against the euro after a flash estimate of euro zone inflation data came in weaker than expected, increasing pressure on the European Central Bank to cut interest rates.

Analysts said the prospect of an ECB rate cut at the bank’s next interest rate meeting on Jan. 15 was pressuring the single currency, and consequently gold.

A firm dollar reduces gold’s appeal as an alternative investment. However, the U.S. currency trimmed gains versus the euro after data showed U.S factory orders and pending home sales dropped by more than expected in November.

DEMAND FIRM FROM FUNDS

But while the stronger dollar and reports of lackluster jewelery sales weighed on prices, demand for the metal from exchange-traded funds — which issue securities backed by stocks of physical gold — remains firm.

ETF Securities, which operates Europe’s largest gold-backed ETF, said holdings of its Physical Gold exchange-traded commodity rose 2 percent in the week to January 2 to 1.899 million ounces.

Holdings of the world’s largest bullion ETF, the SPDR Gold Trust (GLD), held at a record 780.23 tonnes on Monday.

“Gold is holding (where it is) because of investment demand for gold ETFs, rather than demand from the physical side or as a hedge against the U.S. dollar,” said Commerzbank analyst Eugen Weinberg.

Firmer oil prices, which are holding just below $50 a barrel as supply fears were fuelled by Israel’s incursion into Gaza and a dispute between Russia and Ukraine over natural gas, also lent some support to gold.

Among other precious metals, platinum and palladium rallied to multi-week highs, shrugging off a spate of poor vehicle sales news from car makers, the major consumers of the metals.

Spot palladium was the main riser, climbing 8 percent to a six-week high of $198.50. The metal was later quoted at $194.50/199.50, against $183.50 late in New York on Monday.

Platinum also climbed more than 2 percent to $967.50, its highest level for three months. It was later at $958.50/963.50 an ounce against $946.

“With the commodities basket, people are shifting out of gold and into other commodities that have been under performing lately,” said Commerzbank trader Rory McVeigh. “And palladium is probably the biggest underperformer of the market.”

Spot silver eased to $11.11/11.19 an ounce from $11.22.

LONDON, Jan 6 (Reuters)

Gold slid more than 3 percent in Europe on Monday as the strengthening dollar knocked the metal’s appeal as a currency hedge, and oil prices retreated from highs.

Other precious metals tumbled in gold’s wake, with silver falling 8 percent, platinum 3 percent and palladium 6 percent.

Spot gold was quoted at $851.65/853.65 an ounce at 1445 GMT, down from $873.20 an ounce late in New York on Friday, having touched a session low of $843.50.

U.S. gold futures for February delivery on the COMEX division of the New York Mercantile Exchange were down $26.60 at $852.90 an ounce, having earlier touched a low of $843.50.

“The dollar is the critical factor today,” said BNP Paribas analyst Michael Widmer.

The U.S. currency extended gains against the euro to a fresh three-week high on Monday on hopes U.S. President-elect Barack Obama will unveil fresh measures to boost the economy.

Obama is due to meet House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid later in the session to discuss their legislative agendas.

Obama officials have been discussing an economic stimulus bill in the range of $675 billion to $775 billion.

The euro has also been battered by poor Italian and Spanish inflation data and tax cuts in Germany, which are expected to add pressure on the European Central Bank to cut interest rates soon.

“Gold’s move in the last couple of days is almost entirely due to the strength of the dollar,” said UBS commodity strategist John Reade. “The number one, front centre driver of the dollar gold price is where euro-dollar is going.”

The euro-dollar exchange rate “moved sharply higher in December and has come off in the first couple of trading days of this year,” he added. “It has dragged gold with it.”

The precious metal had found good support in early trade as oil prices rose nearly 3 percent after an Iranian military commander called for an oil boycott over Israel’s offensive in the Gaza Strip.

However, it has slipped as oil gave up those gains.

Gold usually moves in line with oil prices, both because firmer crude boosts interest in the precious metal as a hedge against oil-led inflation and increases the appeal of commodities as an asset class.

JEWELERY BUYING SOFT

Demand for gold jewelery has been hit by the higher prices. Sales in Abu Dhabi fell 40 percent in December from a month before, the emirate’s industry group said.

Gold buying in India, the world’s largest market for the precious metal, has been crimped by higher prices, traders said.

“People would want to buy if prices fall below 12,500 rupees,” said Mayank Khemka, managing director of Delhi-based Khemka International. Prices are currently around 13,500 rupees.

Among other precious metals, silver slipped in line with gold to a low of $10.54, before recovering to $10.86/10.94 an ounce from $11.52 late on Friday.

Platinum and palladium also fell, with both metals suffering from expectations demand from car makers will continue to fall.

France and Japan posted steep falls in December car sales on Monday, while U.S. auto sales numbers are due later in the session.

Automakers are responsible for around 50 percent of global platinum and palladium demand.

Platinum eased to $925.50/935.50 an ounce from $944, while palladium dipped to $182/187 an ounce from $190.

LONDON, Jan 5 (Reuters)

Gold edged down on Friday as the dollar firmed against the euro, but trading was quiet as investors awaited the outcome of OPEC’s production meeting this weekend and a spate of data due next week for fresh impetus.

Spot gold was quoted at $810.00/812.50 an ounce at 1310 GMT, down from $814.60 an ounce late on Thursday, as the firmer dollar dented interest in the metal as a currency hedge.

The euro slipped after data showed falling inflation in the euro zone, boosting expectations the European Central Bank will cut interest rates further. [ID:nLS548735]

Falling oil prices are also doing little to help gold, which typically moves in line with crude. Traders are awaiting the outcome of this weekend’s meeting of the OPEC oil cartel, at which production cuts will be discussed. [ID:nSP342706]

“Obviously there is still a correlation between oil and gold,” Wolfgang Wrzesniok-Rossbach, head of sales at Heraeus, said. “If OPEC make a decision which might drive the oil price up, that would also be positive for gold.”

Despite the gold price dip, the precious metal is heading for its biggest monthly gain in nine years as investors spooked by the outlook for the global economy buy into the metal as a haven.

Prices have climbed some $90 an ounce, or 12 percent, this month. Gold is also up 12 percent in euro terms, and 15 percent in terms of the Australian dollar.

“Investment (in gold) is strong because there is huge concern over the economic and financial environment, both in the short and possibly the longer term,” RBS Global Banking & Markets metals strategist Stephen Briggs said.

“The measures being taken to stabilise the situation may lead to inflationary fears down the road, so gold has a double benefit from that.”

Gold is typically seen as a hedge against inflation.

DATA

Traders will also be watching for a raft of economic data due out next week, which could have a significant impact on the dollar. U.S. auto sales are due out on Tuesday, and U.S. non-farm payrolls on Friday.

“Next week, manufacturing indices for all major economies will be released,” Standard Bank analyst Walter de Wet said. “This should indicate the speed at which manufacturing is contracting globally.”

Dresdner Kleinwort said on Friday it expects gold prices to average $870 an ounce this year, falling to $740 an ounce in 2009. For silver, it forecasts an average price of $15 an ounce in 2008 and $9.75 next year.

But Wrzesniok-Rossbach at Heraeus said delegates at a forum on Thursday organized by the precious metals group expected gold prices to hit new highs next year.

“Consensus was that in the long run all the bailouts we are seeing, whether in the car industry, the banking industry or others … will (create) inflation, and that would be positive for gold,” he said.

Among other precious metals, spot platinum was quoted at $860.50/880.50 an ounce, slightly up from $853 late on Thursday. Palladium was at $184/192 an ounce against $187.50.

Silver was at $10.12/10.20 an ounce against $10.31 an ounce.

The industrial precious metals have suffered more from the economic downturn than gold, with platinum and palladium, which are chiefly used in catalytic converters, both dropping significantly from their summer highs.

By Jan Harvey
LONDON, Nov 28 (Reuters)