RTRS:PRECIOUS-Gold drops to three-week lows on stimulus fears
SINGAPORE, Aug 7 (Reuters) - Gold extended losses into a
third session on Wednesday, falling to a three-week low after
strong U.S. trade data and comments by a Federal Reserve
official stoked fears that the U.S. central bank could start
tapering its stimulus from next month.
FUNDAMENTALS
* Spot gold had dropped 0.5 percent to $1,275.41 an
ounce by 0015 GMT, after losing over 1.5 percent on Tuesday. The
metal hit a trough of $1,275.36 on Wednesday, its lowest since
July 18.
* U.S. gold dropped $8 to $1,274.50.
* The U.S. economy likely grew faster than initially
reported in the second quarter, thanks to a sharp narrowing in
the trade deficit to its lowest in more than 3-1/2 years in June
as exports touched a record high and imports fell.
* The Fed will probably reduce its massive bond-buying
stimulus programme later this year, and depending on economic
data could do so as early as September, a top central bank
official said on Tuesday.
* A dramatic drop in the recycling of gold jewellery was
helping to rebalance the global bullion market, now in surplus,
and could set the stage for a price recovery, the
industry-funded World Gold Council said on Tuesday.
* German gold trading company Degussa Goldhandel said on
Tuesday it had acquired regional precious metals dealer SilviOr
GmbH, in a bid to expand trading and vaulting capacity to meet
expected growth in coin and bar demand.
* SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.23 percent to
915.04 tonnes on Tuesday.
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MARKET NEWS
* The dollar fell broadly on Tuesday, hitting a six-week low
against the yen, as investors pared back bets on the U.S.
currency on uncertainty about when the Fed will start reducing
its bond purchases.
DATA/EVENTS (GMT)
0645 France Trade data
1000 Germany Industrial output
1900 U.S. Consumer credit
