RTRS:PRECIOUS-Gold reverses losses to trade near 3-week high
* Gold up for fifth straight session
* China gold data, ETF inflows boost sentiment
* Coming up: U.S. retail sales for July at 1230 GMT
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Aug 13 (Reuters) - Gold reversed earlier losses
on Tuesday, trading near three-week highs on hopes that physical
buyers and investors would return to the market.
The metal is up for a fifth straight day, gaining strength
from a weaker dollar and a surprise rise in holdings of gold
exchange-traded funds (ETFs).
"The sentiment in gold has definitely improved recently,"
said Danny Laidler, head of ETF Securities' Australia and New
Zealand business.
"The massive redemptions we saw in April have reduced every
month. Hopefully the large outflows have stopped."
Spot gold had risen 0.2 percent to $1,338.16 an ounce
by 0714 GMT, not far from a three-week high of $1,343.06. Silver
also added to gains from the previous session.
Gold rose nearly 2 percent the previous day on strong
Chinese gold consumption and an inflow to SPDR Gold Trust,
the world's biggest gold ETF on Friday. The fund's holdings on
Monday were unchanged.
The top eight gold ETFs tracked by Reuters have recorded
outflows of about $26 billion so far this year, hurting gold
prices. A reversal in the trend would aid a price recovery.
China's gold consumption surged in the first six months of
the year as sliding prices of the metal lured buyers, data
showed on Monday, reinforcing expectations that the nation will
overtake India as the world's top gold consumer this year.
Gold has fallen about 20 percent this year amid expectations
the U.S. Federal Reserve will start to scale back its economic
stimulus, which has supported gold's role as a hedge against
inflation.
"Gold prices have been supported lately despite continuing
talk of the Fed cutting back on stimulus in September. The main
reason being the strong physical market in China," said Phillip
Futures analyst Joyce Liu.
With key U.S. economic data due this week, the focus could
shift back to the timing of any pull-back in the Fed's stimulus.
However, some experts say even if the bank begins tapering
this year the impact will be fairly limited.
"The expectations of a QE tapering are already priced in,"
said ETF Securities' Laidler, referring to quantitative easing.
"There will not be a massive downside when the tapering begins."
