PRECIOUS-Gold rebounds on dollar, shares slide aft
Post# of 63688
PRECIOUS-Gold rebounds on dollar, shares slide after China data.
Thu May 23, 2013 6:42am EDT 
Recommended Video
Read
- London attacker British, of Nigerian origin: source |
1
- Global shares sink, following 7.3 percent drop in Japan's Nikkei
2
- RPT-Ford to close Australia auto plants
3
- British soldier hacked to death in suspected Islamist attack
4
- China factory activity shrinks for first time in seven months: flash PMI |
5
Discussed
-
Taxes on some wealthy French top 100 pct of income: paper -
IRS’ Lerner says did nothing wrong, refuses to answer questions -
Analysis: Some Republicans see new scandal in Sebelius fundraising
Sponsored Links
|
| ||||||
| Ads by Marchex | |||||||
PRECIOUS-Gold rebounds on dollar, shares slide after China data
* U.S. dollar falls 0.5 percent vs basket of currencies * China PMI shrinks for first time in 7 months * U.S. weekly jobless claims at 1230 GMT eyed (Updates throughout, changes dateline from SINGAPORE) By Clara Denina LONDON, May 23 (Reuters) - Gold bounced back on Thursday from the previous session's losses as the dollar fell sharply and European shares dropped after weak Chinese factory activity added to concerns about a delayed recovery in the country. The flash HSBC Purchasing Managers' Index in China for May slipped under the 50-point level separating expansion from contraction, for the first time since October. Spot gold rose 1.4 percent to $1,388.49 an ounce by 1013 GMT. U.S. gold futures rose 1.5 percent to $1,387.70 an ounce. "Expectation that China's growth is perhaps not as strong as it was, the equity rally, which has wobbled a bit just in past few hours and dollar weakness are lending support to gold," Mitsubishi analyst Jonathan Butler said. The dollar index fell 0.5 percent against a basket of currencies , mostly due to a two-week high in the yen, while European shares fell on concerns over an end to quantitative easing in the United States and weak economic data from China. Gold holds a traditional inverse relation with the dollar and a weaker greenback makes dollar-denominated commodities cheaper for holders of other currencies . The U.S. currency however remains around 20 percent stronger on the year and is generally expected to retain some gains in the coming months as the country's economy continues to improve. "Over the coming months the general trend is for a modest economic recovery in the developed markets and that's going to fuel growth in the equity markets and the dollar," Butler said. "This, together with expectations of tightening quantitative easing, should see gold coming under pressure." Spot bullion fell more than one percent on Wednesday after Fed Chairman Ben Bernanke said a decision to reduce the central bank's $85 billion bond-buying programme could be taken in the 'next few meetings' depending on whether the economy maintained momentum. "It seems the market is now squarely focusing on the September 17-18 FOMC meeting for the Fed to make its move," ING said in a note. Gold previously reached a one-week high at $1,414.25 an ounce as the Fed chairman's prepared testimony to the Congress sounded more dovish. He said a premature tightening of monetary policy carried substantial risks to the economic recovery. The market is turning its attention towards U.S. weekly jobless claims later in the day. The precious metal has fallen around 17 percent since the start of the year, as investors have generally fled to higher-yielding assets such as stocks . Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.3 percent to 1,020.07 tonnes on Wednesday, the lowest in more than four years. DEMAND CONCERNS Weaker economic data from China, which raises concerns over whether the country can sustain an economic revival this year, come at a time when physical gold demand in Asia has been normalising. Traders saw record gold demand in price-sensitive physical markets like China and India after the metal fell to a more than two-year low of $1,321.35 an ounce on April 16. But that demand was now tapering off as jewellers had largely replenished their stocks and retail investors satisfied their needs, analysts said. Spot silver rose 1.6 percent to $22.56 an ounce, while platinum fell 0.5 percent to $1,458.24 an ounce and palladium lost 1.4 percent to $733.97 an ounce. (Additional reporting by A. Ananthalakshmi in Singapore; editing by James Jukwey)
(0)
(0)
Follow Reuters