July 9, 2012 / 4:37 AM / 8 years ago

PRECIOUS-Gold extends losses to 3rd session after US data

 * Prices may remain rangebound, investors in wait-and-see
 * China's June inflation cools, gives Beijing scope to ease
 * Spot gold could fall to $1,540/oz - technicals
 * Coming up: U.S. CFTC commitment of traders, weekly; 1930

 (Adds details, comments; updates prices)
 By Rujun Shen
 SINGAPORE, July 9 (Reuters) - Gold inched down on Monday,
extending losses to a third session, on a lack of conviction the
U.S. Federal Reserve would take measures to stimulate the
economy anytime soon even after a disappointing jobs report.
 U.S. non-farm payrolls increased by just 80,000 in June,
lower than a forecast of 90,000, raising pressure on the Fed to
do more to help the frail recovery. 
 "The market is not sure where prices should go and the
sentiment is fragile," said Lynette Tan, an analyst at Phillip
Futures, adding that prices are likely to remain rangebound for
the time being with investors stuck in data-watching mode. 
 Though June's payrolls increase fell short of expectation,
it still exceeded the May number and could be seen as a slight
improvement, putting a damper on hopes for a third round of
quantitative easing from the Fed, Tan added.
 On June 1 gold jumped 4 percent at a surprisingly weak
employment report which fuelled talks of further monetary easing
from the Fed. The central bank's stance on easing has played a
major role in the gold market this year.
 Spot gold dropped to its lowest in almost two weeks
of $1,575.89 an ounce, before recovering slightly to $1,580.09
an ounce by 0346 GMT.
 However, Reuters market analyst Wang Tao expects spot gold
to fall to $1,540 an ounce during the day. 
 U.S. gold futures contract for August delivery was up
0.2 percent to $1,581.20.
 The dollar and Treasuries trumped gold as top destinations
for the flight to safety, as investors fretted about the global
economic outlook with euro zone fighting its debt crisis and
China showing signs of an economic slowdown.  
 China's annual consumer inflation in June cooled, giving
Beijing more scope to ease monetary policy to support growth but
potentially taking some heat off gold, a traditional hedge
against inflation, in the world's upcoming biggest gold
 Asia's physical gold market has been sluggish for a while,
as the rangebound price moves did little to excite investors.
 "India is not even responding to the stronger rupee," said a
Singapore-based trader, "Physical supply seems high and scrap is
coming into the market."
 Hedge funds have also moved to the sidelines of the market
as volatility drops, he added.
 Precious metals prices 0346 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1580.09   -2.41   -0.15      1.04
  Spot Silver        27.18    0.11   +0.41     -1.84
  Spot Platinum    1439.25    1.12   +0.08      3.32
  Spot Palladium    577.86    4.96   +0.87    -11.44
  COMEX GOLD AUG2  1581.20    2.30   +0.15      0.92         9336
  COMEX SILVER SEP2  27.17    0.24   +0.91     -2.69         2261
  Euro/Dollar       1.2285
  Dollar/Yen         79.63
  COMEX gold and silver contracts show the most active months
 (Editing by Himani Sarkar)
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