Sun Apr 29, 2012 11:28pm EDT
* Spot gold signals mixed-technicals
* Coming Up: U.S. Chicago PMI April; 1345 GMT
(Adds details, quotes)
By Lewa Pardomuan
SINGAPORE, April 30 (Reuters) - Gold held near a 2-week high
on Monday on prospects of more safe haven buying, with the
dollar under pressure from weaker-than-expected U.S. economic
data and speculation the Federal Reserve could ease policy
further to boost growth.
Although the slowdown may not be bad enough to prompt the
Fed to launch a third round of bond buying, or quantitative
easing, expectations for such a move plus fears about the debt
crisis in Europe could offer gold much-needed impetus to break
free from the current range.
Money managers in gold futures and options had slashed net
long positions in the week ended April 24 for a third decline in
four weeks, after gold failed to break out of a narrow range.
Gold added $1.12 to $1,663.44 an ounce by 0301 GMT,
but the metal was heading for its third monthly decline. Bullion
had risen to $1,667.11 on Friday, its strongest since April 13,
on disappointing U.S. growth and European debt jitters.
"In the short run, you can have one or two weeks for the
market to get excited about QE. It's fair enough. I am still
going to call for a lower gold price," said Dominic Schnider,
head of commodity research at UBS Wealth Management in
Singapore.
"The target is still $1,520. But that really goes in line
with the view the economy is on a better footing. If there's no
need for QE, then our call will be spot on. But if you look for
QE, we are going to have a situation where prices will trend
higher."
The U.S. economy, the world's largest, expanded at a 2.2
percent annual rate in the first three months of the year, below
economists' expectations of a 2.5 percent pace, raising the
prospect of further stimulus from the Fed.
Gold rallied to its highest level in 2012 around $1,790 in
late February after the Fed at the time said it would keep
interest rates near zero until at least the end of 2014.
The U.S. dollar held near its weakest since late February
against the yen after the disappointing first-quarter
U.S. economic growth data, while the euro was still stuck
in a range because of the lingering debt crisis in Europe.
Spain, the euro zone's fourth largest economy and current
focus of the debt crisis, will face a challenge selling bonds
this week after a surprise two-notch credit rating downgrade
pushed up yields on its debt.
Standard & Poor's cut Spain to triple-B plus - three notches
above "junk" - citing expectations government finances will
deteriorate even more as the economy contracts and as a result
of an ailing banking sector.
Gold raced to a record of around $1,920 last September on
fears the euro debt crisis could spiral out of control and stall
global growth.
U.S. gold for June was little changed at $1,664.50
an ounce.
"We don't know whether there will be QE3, so we have to wait
for more economic data to come out. If the economic performance
continues to be good, then there will be a diminishing prospect
for QE," said a physical dealer in Hong Kong.
"There's no support from the physical market for the time
being. The festival season is coming in India but physical
buying is not aggressive."
Gold traders in India, the world's top buyer of the bullion,
refrained from buying despite the peak of the wedding season,
hit by a huge stock pile and high domestic prices.
Gold jewellery is an essential part of the dowry basket
Indian parents give their daughters at weddings.
Precious metals prices 0301 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1663.44 1.12 +0.07 6.37
Spot Silver 31.30 0.07 +0.22 13.04
Spot Platinum 1571.24 4.89 +0.31 12.80
Spot Palladium 679.22 1.24 +0.18 4.10
COMEX GOLD JUN2 1664.50 -0.30 -0.02 6.24 1993
COMEX SILVER MAY2 31.31 -0.04 -0.13 12.14 205
Euro/Dollar 1.3239
Dollar/Yen 80.12
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