RTRS:PRECIOUS-Gold inches down, holds near 6-mth top; ECB eyed
* Gold ETF holdings hit record high
* Bullish target at $1,711/oz aborted for spot gold
-technicals
* Coming Up: Euro zone Markit services PMI; 0758 GMT
(Updates prices)
By Rujun Shen
SINGAPORE, Sept 5 (Reuters) - Gold inched lower on
Wednesday, but did not stray far from a near six-month high hit
in the previous session as weak U.S. data reinforced hopes of
stimulus measures, while investors eyed a key European Central
Bank meeting this week for trading cues.
U.S. manufacturing activities shrank at their sharpest clip
in more than three years last month, feeding hopes the Federal
Reserve could act soon to shore up the frail economy. The ECB is
also under increasing pressure to cut excess borrowing costs
ahead at a policy setting meeting on Thursday.
Investors may adopt a cautious approach before the meeting,
and the all-important U.S. non-farm payrolls data due on Friday,
analysts said.
"It is a little too early to go full throttle," said Dominic
Schnider, an analyst at UBS Wealth Management in Singapore.
"Will QE really come? Policymakers are heating things up,
but will what eventually comes out to be as big as the market is
looking for?"
Gold's fortune this year has largely hinged on the Fed's
attitude towards another round of quantitative easing, or QE3,
which, if materialised, could further boost gold's appeal to
investors seeking a hedge against inflation caused by rampant
cash printing.
Encouraged by Fed Chairman Ben Bernanke's comment last week
on the grave conditions of the U.S. labour market which kept the
door wide open for more stimulus measures, spot gold advanced to
$1,698.45 on Tuesday, its highest level in nearly six months.
According to technical analysis, a bullish target at $1,711
an ounce has been aborted for spot gold, as the resistance near
$1,700 proved strong, Reuters market analyst Wang Tao said.
Spot gold edged down 0.2 percent to $1,691.64 an
ounce by 0619 GMT. U.S. gold was little changed at
$1,694.40.
A slightly stronger dollar also weighed on gold.
GOLD ETF HOLDINGS HIT RECORD HIGH
Holdings of gold-backed exchange-traded funds rose to a
record high of 71.889 million ounces (2,038 tonnes) by Sept. 4.
SPDR Gold Trust, the biggest gold ETF, reported its
holdings rose to 1,293.138 tonnes, the loftiest level since
mid-March.
Silver ETF holdings stood at 501.503 million ounces, easing
from 504.431 million hit in late August, the highest level since
May 2011.
Spot silver dropped 0.6 percent to $32.12 an ounce,
easing from a 4-1/2-month high of $32.42 hit in the previous
session.
"Although physical silver demand remains sluggish, the
sentiment is bullish after prices broke above the 200-day moving
average convincingly," said a Shanghai-based trader, adding that
investors may hold off on action until Friday's U.S. jobs data.
The Relative Strength Index readings on spot gold and silver
remained above 70, suggesting they were still in overbought
territory.
Precious metals prices 0619 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1691.64 -2.50 -0.15 8.17
Spot Silver 32.12 -0.18 -0.56 16.00
Spot Platinum 1549.99 -12.71 -0.81 11.27
Spot Palladium 634.72 -2.08 -0.33 -2.72
COMEX GOLD DEC2 1694.40 -1.60 -0.09 8.14 10474
COMEX SILVER DEC2 32.18 -0.24 -0.73 15.26 3318
Euro/Dollar 1.2521
Dollar/Yen 78.38
COMEX gold and silver contracts show the most active months
