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PRECIOUS-Gold steady but quickening fund outflows put prices at risk
May 22, 2014 / 4:16 AM / 3 years ago

PRECIOUS-Gold steady but quickening fund outflows put prices at risk

* SPDR sees outflow of 3.3 tonnes, most in three weeks
    * Fund holdings at lowest since December 2008
    * Coming Up: U.S. weekly jobless claims, Markit
manufacturing flash PMI

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, May 22 (Reuters) - Gold held steady on Thursday
but was at risk of dropping as holdings in the top
bullion-backed fund fell the most in three weeks to a fresh
five-year low.
    Investors were also eyeing U.S. data to be released later in
the day for a break from the narrow trading band over the last
few sessions, with prices unable to close above $1,300 or below
$1,290 an ounce.
    "The trading ranges are getting narrower but a breakthrough
isn't very far away," said Mark To, head of research at Hong
Kong's Wing Fung Financial Group.
    "The $1,300 level is still going to be the anchor and some
long positions can be built under that level," he said.
    Spot gold edged up slightly to $1,293.96 an ounce by
0636 GMT, after closing between $1,291 and $1,296 in the last
five trading sessions.
    SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 3.3 tonnes to
776.89 tonnes on Wednesday - the lowest since December 2008. 
    The outflows are the biggest since April 30. 
    The fund is considered a good measure of investor sentiment
and is likely to influence prices due to the size of its
holdings.
    Minutes from the Fed's April policy meeting showed that
policymakers in the U.S. central bank began to lay the
groundwork for an eventual retreat from their extraordinarily
easy monetary policy with a discussion of the tools they could
employ to accomplish the task, with no final decisions taken.
 
    In the physical markets, India's central bank eased tough
gold import rules on Wednesday by allowing seven more private
agencies to ship the precious metal, a move that industry
officials say could augment supplies and reduce premiums in the
peak wedding season. 
    India is the second biggest gold buyer after China. 
    Among other precious metals, platinum added to gains
on supply fears as strikes in major producer South Africa
dragged on for a 17th week.    
    Palladium was steady after climbing to a 2-1/2-year
high in the previous session.
    
    PRICES AT 0636 GMT
 Metal           Last     Change  Pct chg
                                  
 Spot gold       1293.96    2.56      0.2
 Spot silver        19.4    0.02      0.1
 Spot platinum    1470.5     5.5     0.38
 Spot palladium      826     0.1     0.01
 Comex gold       1294.3     6.2     0.48
 Comex silver      19.47   0.132     0.68
 Euro             1.3667                 
 DXY              80.169                 
                                         
 COMEX gold and silver contracts show the
 most active months
 
    

 (Editing by Joseph Radford and Muralikumar Anantharaman)

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