PRECIOUS-Gold stretches gains as weak U.S. data hits dollar
* Disappointing U.S. numbers bolster gold's safe-haven appeal * Coming up: ICSC weekly chain store sales at 1145 GMT * Gold neutral in $1,590-$1,620 range -technicals (Updates prices, adds quotes) By Lewa Pardomuan SINGAPORE, April 2 (Reuters) - Gold extended gains on Tuesday, with the dollar dropping after disappointing U.S. data stoked concerns about a patchy recovery in the world's largest economy. But investors were loth to build positions too much ahead of payrolls data on Friday, which will shed more light on the strength of the U.S. pickup. Gold hit an intraday high of $1,603.60 an ounce and was steady at $1,599.20 by 0655 GMT. It rallied to a 1-month peak in March on worries about fiscal stability in Europe, as politicians scrambled to clinch a bailout for Cyprus. "I think sentiment is neutral. (Gold) can't break through $1,620-$1,625, but on the downside, we can say $1,590-$1,585 seems to be the floor," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. "I think the U.S. economy will still continue to recover. The economy in the U.S. is still improving - of course, sometimes the pace is fast, sometimes it's slow." U.S. factory activity grew at the slowest rate in three months in March, indicating the economy lost some momentum at the end of the first quarter. But other recent data pointing to a strengthening economy has helped push stocks to record highs on both the Dow and S&P 500. In theory, strong stock markets should prompt investors and speculators to ditch gold and shift to equities. U.S. gold for June was at $1,599.80 an ounce, down $1.10 after hitting a high of $1,604.30. "Offering some support going forward, is the renewed turmoil in Europe in the wake of the Cyprus debacle and the Italian political stalemate, coupled with the fact that budget uncertainties in the U.S. and the debt ceiling debate remain unresolved," INTL FCStone said in a monthly report. "We see these crosscurrents in place for a little while longer and expect a trading range market in gold of roughly $1,560-$1,635 over the next month." The yen rose to a one-month high against the dollar as the U.S. data prompted investors to sell the greenback, while Japan's Nikkei stock average fell 1.1 percent to a nearly four-week low on Tuesday. The firmer Japanese yen dragged down gold contracts on the Tokyo Commodity Exchange (TOCOM), with no signs of buying related to tensions in the Korean peninsula. Gold bars remained on par with spot London prices in Tokyo. Premiums for gold bars were little changed in Singapore and Hong Kong at $1.20 to $1.50 an ounce to spot London prices. "We saw buying interest from the general public on TOCOM this morning, but then it disappeared. They don't want to buy or sell because of the matters concerning North Korea," said a dealer in Tokyo. "But of course if North Korea decides to use nuclear weapons, then it will affect the market big time." The United States has positioned a warship off the Korean coast as a shield against ballistic missile attack as South Korea's new president vowed swift retaliation against a North Korean strike amid soaring tensions on the peninsula. Precious metals prices 0655 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1599.20 0.80 +0.05 -4.50 Spot Silver 27.98 -0.03 -0.11 -7.60 Spot Platinum 1587.00 -3.59 -0.23 3.39 Spot Palladium 771.00 -8.00 -1.03 11.42 COMEX GOLD JUN3 1599.80 -1.10 -0.07 -4.54 12006 COMEX SILVER MAY3 27.95 0.01 +0.02 -7.54 4003 Euro/Dollar 1.2856 Dollar/Yen 92.88 COMEX gold and silver contracts show the most active months (Editing by Joseph Radford)
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.