WSJ: PRECIOUS METALS: Gold Near Steady in Quiet Trade
--Comex Dec gold down 0.1% at $1,614.70/oz
--Gold trading continues to suffer from low volumes
--HSBC cuts outlook on platinum, palladium prices
By Tatyana Shumsky
NEW YORK--Gold futures held near unchanged amid low-volume trading Thursday as investors looked for cues from currency and equity markets.
The most actively traded contract, for December delivery, was recently down $1.30, or 0.1%, at $1,614.70 a troy ounce on the Comex division of the New York Mercantile Exchange.
Gold futures trading has been unusually quiet in recent days, with contract turnover sliding in below 100,000 for three consecutive days. The first such low-volume streak since December 2009.
"Average daily trading volume for the active gold futures contract this week has been a paltry 74,500 lots," traders at TD Securities said in a note to clients. "Given that 'normality' is somewhere around the 150,000-200,000 area and a busy day is 250,000 plus lots traded, it is more than evident that we are in Summer doldrums and in need of inspiration."
Thin trading volumes can add to price volatility as there are fewer market participants to absorb larger orders, and prices can easily shoot higher or lower.
A stronger dollar, which pressured the euro lower, weighed on gold prices. The euro was recently down 0.6% at $1.2294. Gold futures are traded in dollars and become more expensive for investors who use other currencies.
U.S. stock futures pointed to a lower market open for the Standard & Poor's 500 stock index, with the contract recently down 0.1%.
Nymex platinum for October delivery was recently unchanged at $1,41.20 a troy ounce, while September-delivery palladium was down 0.4% at $584.00 a troy ounce.
HSBC lowered its outlook on platinum and palladium prices for 2012 through 2014, citing weaker-than-expected demand for the metals from the auto sector. A major application for both platinum and palladium are car exhaust filters, known as catalytic converters.
Production cuts triggered by lower prices should soon offer some support to the market, HSBC said.
HSBC cut its 2012 platinum forecast by 14.1% to $1,525/oz and its 2013 outlook by 11.0% to $1,625/oz. For palladium, the bank reduced its 2012 outlook by 16.6% to $655/oz and its 2013 outlook by 9.1% to $750/oz.
