Gold slips as U.S. equities open higher

LONDON - Gold slipped on Thursday afternoon after holding a broadly flat trajectory as U.S. shares opened higher after a strong session in Europe, denting the precious metal’s appeal as an alternative asset.



By (Reuters)

Published: Thu 16 Apr 2009, 9:02 PM

Last updated: Thu 2 Apr 2015, 3:38 AM

Sluggish investment and physical demand were providing little support to prices, analysts said.

Spot gold was bid at $881.25 an ounce at 1347 GMT against $890.60 late in New York on Wednesday.

U.S. stocks opened higher after better-than-expected quarterly results from JPMorgan Chase & Co and several positive reports from the tech sector.

European shares rose earlier on Thursday, with the FTSEurofirst 300 rising above 800 points for the first time since February 13.

“The market seems to be suffering from longs getting out as equity markets offer better returns, and gold is less sought after as a safe haven,” said Citi analyst David Thurtell.

The precious metal has traded in a narrow $20 range so far this week as the market is pulled between conflicting signals on inflation and the outlook for the stock and currency markets.

Pradeep Unni, senior analyst at Richcomm Global Services in Dubai, said uncertainty is limiting moves in gold.

“Investors seem to be waiting for clues from stock markets and currency markets, but nothing solid is emerging,” he said. ”While investment demand continues to be strong in the metal, a renewed rally in stocks has hampered further flows.”

On the currency markets, the dollar was a touch firmer versus the euro as hopes for a speedy economic recovery receded, pushing investors towards assets seen as safer.

A stronger dollar usually weighs on gold, which is often bought as an alternative investment to the U.S. currency.

Investment demand remains soft. The world’s largest gold-backed exchange-traded fund, New York’s SPDR Gold Trust, has recorded no fresh inflows in nearly a week.

The trust’s holdings have risen less than quarter of a tonne so far in April, compared to nearly 40 tonnes in the comparable period a month before.

Auspicious

Indian jewellery sales continued to pick up on Thursday ahead of the key Hindu festival of Akshaya Tritya, an auspicious day for gold buying. However, volumes are “not huge”, according to one Chennai-based wholesaler.

Jewellery demand in India has slumped in the last year as prices have risen. Traders say buyers are awaiting further price falls before making purchases.

“The metal... could look to spend more time in limbo in the current $865-900 range as increasing physical interest absorbs pockets of stale liquidation, or until a clearer picture of the world economies is seen,” said James Moore, an analyst at TheBullionDesk.com.

Among other precious metals, spot platinum was bid at $1,206.50 an ounce against $1,216.50, while spot palladium was bid at $232 an ounce against $234.50.

Platinum has steadied since hitting a 6-1/2 month high on Monday on expectations the downturn in the global car industry may be easing, which boosted buying of the metal used in autocatalysts.

Rhodium climbed another $50 an ounce or 4 percent to $1,300 an ounce, its highest level since early December, building on the previous session’s 9 percent gains.

The metal is benefiting from rising platinum prices and hopes for better car demand.

Silver was bid at $12.35 an ounce against $12.75.


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