Tags: gold | precious

Gold Extends Losing Streak to Four Days

Wednesday, 18 April 2012 03:43 PM

Gold fell on Wednesday for a fourth session, its longest losing streak this year, as lackluster physical demand from major Asian consumers and weak crude oil prices sent prices lower in quiet trade.

The metal, which has tended to follow equities and riskier assets, again came under pressure as U.S. equities retreated on disappointing earnings from several bellwether companies.

Investor interest has appeared to wane as volume in U.S. gold futures was on track to be one of the lowest this year. Bullion has lost over 2 percent during its four-day decline brought about by renewed European debt jitters.

Spot gold was down 0.6 percent at $1,639.81 an ounce by 2:36 p.m. EDT (1836 GMT).

U.S. gold futures for June delivery settled down $11.50 at $1,639.60 an ounce. Volume was less than 100,000 lots, one of the quietest sessions this year, preliminary Reuters data showed.

Analysts had expected the metal to regain momentum after the end of a 22-day jewelers' strike in India, the world's largest gold buyer.

"The lack of physical demand in Asia was an issue. We haven't seen India come back heavily after the end of the jeweler strike. And volume was low so it doesn't take a great deal of selling to move the market," said James Steel, chief commodity analyst at HSBC.

Lingering concerns about Spain's finances added to the cautious tone for gold and other markets. Spain paid a stiff premium at Tuesday's debt auction compared to a month before, boding ill for Thursday's long-term debt sale.

While gold rose in 2011 in times of elevated risk aversion, it has since reverted to trading in line with other commodities and against the U.S. dollar, which is now the safe haven of choice. Oil futures fell on higher than forecast U.S. crude inventories, which posted the biggest four-week rise in more than three years.

Bullion has also fluctuated along with expectations for U.S. monetary policy, with fading hopes of a fresh round of asset-buying known as quantitative easing (QE), which would keep the interest rate and the cost of holding the metal down.

All eyes are on next week's meeting of the policy-setting Federal Open Market Committee (FOMC), which will be closely scrutinized for any hints of a third round of QE.

Precious metals investors now await the findings of World Silver Survey 2012 to be released by respected metals research firm Thomson Reuters GFMS later on Wednesday.

Silver was down 0.3 percent at $31.58.

Spot platinum edged down 0.2 percent on the day at $1,574.69 an ounce, while palladium inched up 0.2 percent at $655.95.

© 2018 Thomson/Reuters. All rights reserved.

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Wednesday, 18 April 2012 03:43 PM
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