October 4, 2016 / 1:01 AM / 10 months ago

PRECIOUS-Gold holds losses on firm dollar after positive U.S. data

3 Min Read

Oct 4 (Reuters) - Gold held on to losses early Tuesday,
after falling slightly in the previous session, on a firmer
dollar after an upbeat U.S. economic data.

    FUNDAMENTALS
    * Spot gold edged down nearly 0.1 percent to
$1,310.35 an ounce by 0048 GMT. The bullion fell 0.3 percent to
a near two-week low of $1,309.07 Monday.
    * U.S. gold futures were nearly flat at $1,313.10 an
ounce.
    * U.S. factories ramped up activity in September, shaking
off a one-month contraction in a sign America was resisting the
downward pull of the sluggish global economy. 
    * Positive data usually puts pressure on gold prices,
because investors raise bets on a U.S. interest rate hike that
would increase the opportunity cost of holding non-yielding
bullion. 
    * However, the Federal Reserve would probably not be able to
cut interest rates as aggressively as the last time around if it
were faced with a U.S. recession in the next few years, New York
Fed President William Dudley said on Monday. 
    * The Bank of Japan would deepen negative interest rates to
thwart any sharp spikes in the yen, which the central bank sees
as an obstacle to stoking inflation and economic growth, sources
familiar with its thinking say. 
    * Japanese companies' long-term inflation expectations
weakened in September, a Bank of Japan survey showed,
highlighting the difficult and drawn-out task the central bank
faces in trying to conquer the country's deflationary
mindset. 
    * Charging banks even more to park their money with the
European Central Bank could backfire if the damage to the
banking sector outweighs the benefit for borrowers, ECB
Executive Board member Yves Mersch said on Monday. 
    * The dollar rose against the yen early on Tuesday after
receiving a boost from upbeat U.S. economic data. 
    * The dollar added to overnight gains and was up 0.3 percent
 at 101.925 yen, a 13-day high. The dollar index 
nudged up over 0.1 percent to 95.816.
    * Goldcorp Inc said on Monday it was temporarily
shutting down its Peñasquito gold mine in Mexico as it was
unable to safely continue operations due to a week-long blockade
by a trucking contractor, sending its shares down nearly 5
percent. 
    * India's gold imports fell for a ninth straight month in
September as weak retail demand and higher discounts prompted
banks and refineries to cut overseas purchases of the bullion,
provisional data from consultancy GFMS showed on Monday.
 
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 DATA/EVENT AHEAD (GMT)
    0900 Euro zone Producer prices August 
    1345 U.S. ISM-New York index September

 (Reporting By Nallur Sethuraman in Bengaluru; Editing by
Michael Perry)

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