PRECIOUS-Gold falls as U.S. jobless data suggests economic strength

Thu Jun 26, 2014 6:44pm GMT
 

* Gold down as crude oil down on easing Iraq fears
    * Lack of gold ETF buying could further weigh -analyst
    * Chinese May gold imports from Hong Kong fell 17 pct
    * Coming up: US consumer sentiment Friday

 (Updates market activities)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, June 26 (Reuters) - Gold fell on Thursday
as upbeat U.S. jobless claims data and weaker crude oil prices
sent prices below a two-month high hit earlier this week, and a
lack of investment interest could further pressure the precious
metal, traders said.
    Bullion fell as U.S. consumer spending rose less than
expected in May, prompting economists to downgrade estimates for
second-quarter growth. 
    There is, however, little doubt the economy is expanding,
decreasing gold's appeal as a hedge. Another report on Thursday
showed the number of Americans seeking unemployment benefits
fell again last week. 
    Analysts said gold's recent gains were largely driven by
short covering as speculators aggressively bought back their
bearish bets, while gold-backed exchange traded funds have also
failed to attract buyers despite bullion's rally.
    "With strategic buyers opting not to participate 
in gold's rally, gold upside is certainly questionable," said
Edel Tully, precious metals strategist at UBS.
    Spot gold was down 0.3 percent at $1,315.16 an ounce
by 2:19 p.m. EDT (1819 GMT).
    U.S. COMEX gold futures for August delivery settled
down $5.60 an ounce at $1,317, with trading volume about 10
percent below its 30-day average, preliminary Reuters data
showed. 
    The precious metal had gained 4 percent since last Thursday
and reached a two-month high on Tuesday at $1,325.90 on concerns
over escalating violence in Iraq.
    Gold prices also came under pressure on comments from St.
Louis Fed President James Bullard that interest rate increases
should come sooner rather than later. Also negative was a drop
in crude oil prices as fears eased over export disruption from
war-ravaged Iraq.  
    Physical gold demand in main consumer China remains
lackluster, dealers said, with higher prices curbing some
buying.
    China's total gold imports from Hong Kong dropped 17 percent
to 67.233 tonnes in May from 80.817 tonnes in April, according
to data emailed to Reuters by the Hong Kong Census and
Statistics Department. 
    Among other precious metals, silver was up 0.4
percent at $21.06 an ounce, outperforming gold. 
    Platinum group metal investors continued to monitor
developments in South Africa where mine workers gradually
returned to work after reaching a wage deal with producers to
end a five-month strike.
    Meanwhile, almost a quarter of a million South African
workers in sectors from engineering to communications will
strike indefinitely from July 1 in pursuit of a pay claim.
 
    Spot platinum gained 10 cents to $1,464.50 an ounce,
while spot palladium climbed 0.2 percent to $831.40 an
ounce.
    
2:19 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold AUG   1317.00  -5.60  -0.4  1306.80 1320.60  120,742
US Silver SEP  21.162 -0.009   0.0   20.845  21.175   41,089
US Plat JUL   1470.10  -3.10  -0.2  1461.90 1474.50   10,844
US Pall SEP    835.80   2.55   0.3   827.50  836.50    2,950
Gold          1315.16  -3.84  -0.3  1306.65 1319.80         
Silver         21.060  0.080   0.4   20.820  21.110
Platinum      1464.50   0.10   0.0  1460.50 1469.40
Palladium      831.40   1.90   0.2   828.50  834.15
TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold        125,871   141,679   162,963     13.29   -0.06
US Silver       97,481    64,212    56,414     19.09   -0.62
US Platinum     25,064    16,569    12,516     14.38   -0.44
US Palladium     3,325     7,191     5,876     19.26   -0.30

 (Editing by Veronica Brown, David Evans, Cynthia Osterman and
Marguerita Choy)

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