LONDON: Gold edged lower on Tuesday as the dollar steadied ahead of delayed US jobs data, while investor sentiment was undermined by a big drop in holdings in the largest gold-backed exchange-traded fund ( ETF). Holdings in SPDR Gold Trust fell 10.51 tonnes to 871.72 tonnes on Monday, their lowest since February 2009. It was the biggest one-day fall in the fund's holdings since early July. The fund posted outflows of 430 tonnes so far this year, which has been a big contributor to the 21 percent drop in the gold price in 2013. Spot gold fell 0.2 per cent to $1,311.99 an ounce by 1012 GMT. Technical analysts said that the 100-day moving average at $1,325 is likely to provide near-term resistance, while support stands at $1,304. US gold futures for December were down $3.60 an ounce at $1,312.30. "Non-farm payrolls are two weeks late and after the US government shutdown it may not seem the most accurate description of what is going on in the economy at the moment," Macquarie analyst Matthew Turner said. "On the other hand, employment is the key variable for the Fed tapering," he added. "In terms of gold market reaction, as long as they haven't done it, there is always that suspicion that they can't do because the economy is not that strong, which could support prices." Traders are looking to US nonfarm payrolls for September report at 1230 GMT, after it was delayed by a partial government shutdown this month, to gauge the fate of the Federal Reserve's bond-buying stimulus programme. Gold has been boosted by increased central bank liquidity and a low interest rates environment over the past few years, which encourages investors to put money into non-interest-bearing assets. Economists polled by Reuters believed the Fed could postpone the scaling-back of its $85 billion monthly bond purchases to next year as budget problems in Washington remain unresolved. Last week lawmakers reached only a temporary agreement to avert a historical debt default, raising the risk of another government shutdown early next year. Physical demand for gold in major consumer India remained subdued ahead of the Diwali celebrations, usually considered an auspicious time to buy jewellery. "Importers in India are still struggling to adopt the new import and re-export (80-20) regulation while the import tax hikes have already hurt smaller jewellers," VTB Capital said. In China, premiums to the spot London prices remain near lows for the year, traders said. In other precious metals, silver fell 0.5 per cent to $22.07 an ounce. Spot platinum was down 0.8 per cent to $1,421.47 an ounce, and spot palladium fell 0.8 per cent to $740.97 an ounce. Switzerland's net imports of raw platinum in September fell to their lowest in four months, as exports to China hit a three-month high at 1.903 tonnes, customs data showed.

Source