BLBG:Gold Set for Second Weekly Drop as Data Damp Stimulus Outlook
Gold is poised for a second weekly decline as an improvement in economic data from the U.S. to China damped speculation of more stimulus around the world, reducing demand for bullion as an alternative investment.
Spot gold lost as much as 0.3 percent to $1,736 an ounce, and was at $1,736.63 at 11:45 a.m. in Singapore, 1 percent lower this week. The metal for December delivery slipped 0.4 percent to $1,738 an ounce on the Comex. Holdings in exchange-traded funds, which hit a record 2,582.98 metric tons on Oct. 11, are little changed this week at 2,580.589 tons yesterday, data compiled by Bloomberg show.
Data this week showed China’s industrial production, retail sales and fixed-asset investment accelerated in September after a seven-quarter slowdown in economic growth. U.S. reports showed housing starts jumped to a four-year high and an index of leading economic indicators rose in September by the most in seven months. Gold gained 11 percent in the last quarter after central banks in the U.S., China, Japan and Europe took action to stimulate growth.
“Gold is under a bit of pressure in the near term as economic data, while still uneven, are showing signs of improvement,” said Huang Fulong, an analyst at CITICS Futures Co., a unit of China’s largest brokerage by market value. “The longer-term outlook for higher gold prices remains intact as Europe’s problems still exist and this is evidenced by the resilience we’ve seen in ETF holdings.”
European Summit
European leaders conclude a two-day meeting in Brussels today after committing yesterday to their goal of creating a regional bank supervisor by year-end, putting the region closer to being able to provide direct bank aid from its firewall fund. That will set the stage for talks on how to handle failing banks and exploration of cost-sharing strategies, said European Union Economic and Monetary Affairs Commissioner Olli Rehn.
Spot gold of 99.99 percent purity fell 0.7 percent to 349.70 yuan a gram ($1,739.36) on the Shanghai Gold Exchange. Volumes slipped to 2,555 kilograms yesterday from 3,759 kilograms on Oct. 17.
Cash silver slid 0.3 percent to $32.695 an ounce, set for a third weekly drop. Spot platinum gained 0.1 percent to $1,642.50 an ounce, trimming a second weekly decline. Palladium retreated 0.2 percent to $642 an ounce, paring a weekly advance.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
