RTRS:PRECIOUS-Gold slips as upbeat US data lifts dollar
* Dollar gains on euro, upbeat U.S. economic readings offer
support
* Euro zone debt crisis overhangs financial markets
* SPDR holdings drop 1 percent to lowest since early Nov
(Recasts, updates prices, market activity; adds second byline,
dateline, previously LONDON)
By Carole Vaporean and Jan Harvey
NEW YORK/LONDON, Dec 23 (Reuters) - Gold prices
slipped on Friday, tracking the euro's declines as
upbeat U.S. economic data boosted the dollar, though volumes
were exceptionally light even for a market in holiday mode.
Spot gold eased to $1,604.90 an ounce by 2:44 p.m.
EST (1944 GMT) from $1,605.90 an ounce at Thursday's
close.
In New York, benchmark February gold futures settled
on the COMEX down $4.6 at $1,606, in extremely thin conditions.
Data from the exchange showed trading volume was paltry at
80 percent below its average for the last 30 and 250 days.
"I've actually been trying to trade it (gold) today, but
there's just nothing out there. It's listless," said Zachary
Oxman at TrendMax in Encinitas, California.
Echoing other U.S. participants, he added that the MF Global
bankruptcy debacle has tied up so much money that many players
have exited trade earlier than usual as the year winds down,
leaving trading volumes lighter than usual.
"The volume in gold and the trading in gold has just been
sapped since October. We've had some big down days and that
looks like it was long-side liquidation," Oxman said, adding
that a pre-holiday session like Friday's would normally have 30
to 40 percent more activity.
All U.S. commodity and financial markets will be closed on
Monday for the Christmas holiday.
Gold fell with the euro, which dropped against the dollar,
with further declines likely heading into 2012. The festering
euro zone debt crisis has spurred investors to shun risk.
Dollar gains came with a rise in sales of new U.S.
single-family homes to a seven-month high in November
, on the heels of other signs of improvement in
the U.S. economy on Friday. A higher dollar dampens appetite for
dollar-denominated gold among holders of other currencies.
Optimism on the U.S. economic recovery stands in sharp
contrast to the worry over Europe, as monetary and political
authorities struggle to resolve the region's sovereign debt
crisis and hold the euro zone together.
Gold prices remain on track for their first quarterly
decline since the third quarter of 2008. For the year, they are
up more than 13 percent.
"Markets have now moved into a pretty rock-steady price
range, with most investors on the sidelines ahead of the new
year," said Pradeep Unni, senior analyst at Richcomm Global
Services. "Volatility too has declined significantly."
"In the immediate term it looks like gold will be associated
with the other risky assets and may slip lower when we see a
spike in the U.S. dollar."
Doubts remain over whether this week's European Central Bank
tender of half a trillion euros' worth of cheap loans will be
effective in easing the strain for troubled euro zone economies.
LARGEST GOLD ETF HOLDINGS DECLINE
The world's largest gold-backed exchange-traded fund, the
SPDR Gold Trust, recorded an outflow of just over 13
tonnes on Thursday. Its holdings were on track the first annual
outflow since the fund was launched in 2004.
Inflows into the funds have slackened from the record levels
they hit in recent years.
"The accumulated holdings of the 14 biggest gold ETFs fell
to 74.909 million ounces from the all-time high of 75.902
million ounces set on 14 December, a decrease of 1 million
ounces, or 31.1 tonnes," said HSBC in a note.
From a technical perspective, gold prices are likely to
remain in a relatively narrow range ahead of year-end, with
gains capped by the 200-day moving average at $1,624.46 on
Friday. Analysts at ScotiaMocatta said prices are set to remain
supported above $1,590, the Dec. 20 low.
Among other precious metals, silver was up 0.1
percent at $29.11 an ounce. Spot platinum rose 0.1
percent to $1,420.63 an ounce, and spot palladium gained
1.9 percent to $661.31 an ounce.
Prices at 2:52 p.m. EST (1952 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold 1606.00 -4.60 -0.3% 13.0%
US silver 29.084 0.037 0.0% -6.0%
US platinum 1429.50 5.10 0.4% -19.6%
US palladium 666.25 11.85 1.8% -17.1%
