RTRS:PRECIOUS-Gold falls below $1,300 as strong economic data hurts
* Strong U.S., UK data hurts gold's safe-haven appeal
* Losses deepen on technical selling after breaching $1,300
* Physical demand in China quiet - dealers
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Aug 6 (Reuters) - Gold fell more than 1 percent
on Tusday to close below $1,300, as strong global economic data
dented its safe-haven appeal and physical buying in top
consumers India and China remained subdued.
The metal rose early in Asian trading on a weaker dollar but
failed to find support amid lacklustre demand in China, the
second biggest gold buyer. Losses were exacerbated by technical
selling once the price fell below the $1,300 mark.
Spot gold was down 0.9 percent at $1,291.61 an ounce
by 0710 GMT, hovering near a two-week low. It fell as much as
1.2 percent at one point.
"Once we break below $1,300 and then $1,295, it could go all
the way to $1,280," said one precious metals trader in Hong
Kong. "There is nothing much to hold it up today as we have seen
strong data, and physical demand is quiet."
Growth in the U.S. services sector rebounded from a
three-year low, data showed on Monday, while British businesses
boomed and activity at euro zone companies expanded, albeit
modestly, in July for the first time in 18 months.
Gold has lost close to a quarter of its value this year on
fears the U.S. Federal Reserve will curb its
commodities-friendly bond purchases on signs of economic
recovery.
The Fed is nearer to dialling back its massive bond-buying
programme after the unemployment rate dropped last month, Dallas
Fed President Richard Fisher said on Monday.
Gold hit a two-week low of $1,282.69 on Friday on strong
U.S. economic growth and robust factory activity. However, it
rebounded after a weak jobs report.
"There is not much technical support further down until
$1,284," ANZ analysts said in a note on Tuesday.
PHYSICAL DEMAND SLOW
Gold importers in top bullion consumer India stayed on the
sidelines for a third straight week due to policy uncertainty on
shipments and supporting premiums.
In China, demand has fallen off in recent weeks, dealers
say, as indicated by falling premiums. Gold prices on the
Shanghai Gold Exchange fell 1.4 percent on Tuesday.
Premiums to London spot prices in Hong Kong - a key supplier
to China - have fallen to about $3-$4 an ounce, dealers said,
from $5 two weeks ago.
Holdings in SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, fell 0.2 percent to 917.14
tonnes on Monday.
