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PRECIOUS-Gold poised for worst week in 2 mths, economic optimism dents appeal
May 30, 2014 / 3:17 AM / 3 years ago

PRECIOUS-Gold poised for worst week in 2 mths, economic optimism dents appeal

* Bullion drops nearly 3 percent this week
    * Stronger dollar, equities also hurt gold

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, May 30 (Reuters) - Gold steadied after a
three-day losing streak on Friday, but was heading for its
biggest weekly drop in two months as an improving U.S. economic
outlook dented its appeal as an investment-hedge.
    Spot gold was little changed at $1,256.50 an ounce by
0635 GMT, but not far from a 16-week low of $1,251.10 hit in the
previous session. It is headed for a second monthly drop in
three months.
    The metal is down nearly 3 percent for the week, under
pressure from stronger equities and a firmer U.S. dollar.
    Thursday data showed that the U.S. economy contracted for
the first time in three years in the first quarter, but other
data over the week on jobless benefits, manufacturing and
consumer confidence indicated the economy was recovering well. 
    "Barring a serious conflagration out of the Ukraine that
could involve the Russians, we think prices will likely continue
to work lower given gold's poor technical profile," said INTL
FCStone analyst Edward Meir.
    "We expect prices to eventually settle around the
$1,200-$1,220 level before the current downdraft exhausts
itself," Meir said.
    Pro-Russian separatists shot down a Ukrainian army
helicopter on Thursday, killing 14 soldiers including a general,
as government forces pressed ahead with an offensive to crush
rebellions in the east swiftly following the election of a new
    Gold is often seen as a safe-haven investment at times of
geopolitical uncertainty and lower stock prices.
    But physical demand for the metal has failed to pick up
despite the price drop.
    Premiums in top buyer China have been little changed this
week. Data earlier this week showed that imports from main
conduit Hong Kong fell to a 14-month low in April as importing
banks were adequately stocked amid softer demand and a weaker
yuan currency. 
    Among other precious metals, palladium was on track
for a third straight weekly gain on supply fears from major
producer South Africa, where mineworkers have been on a strike
for the past 18 weeks. 
    Platinum rose nearly 1 percent earlier in the day. 
    PRICES AT 0635 GMT    
 Metal            Last      Change  Pct chg
 Spot gold          1256.5     0.9      0.07
 Spot silver         19.02    0.06      0.32
 Spot platinum     1458.65    6.05      0.42
 Spot palladium     833.75    2.85      0.34
 Comex gold         1256.2    -0.1     -0.01
 Comex silver        19.02   0.006      0.03
 Euro               1.3609                  
 DXY                80.425                  
 COMEX gold and silver contracts show the
 most active months
 (Reporting by A. Ananthalakshmi; Editing by Richard Pullin,
Joseph Radford and Subhranshu Sahu)

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