Gold flat as traders mull last week's data

New York (Nov 11)  Gold remained close to the three-week lows hit last week following much stronger than expected US non-farm payrolls number.

Broker Citigroup, a vociferous bear of the metal recently, said the fall to below $1285/oz on Friday had again left it looking vulnerable on the charts.

The broker already sees fundamental headwinds from a strong dollar following European interest rate cuts; ETF holdings still potentially overhanging the market; the risk of producers hedging; and a lack of a need for protection against a structural threat as global economies recover.

Such viewpoints may drive the price this week in the absence of any major economic data.

The main event will be prospective Fed chairman Janet Yellen’s testimony to the Senate Banking Committee on Thursday, where any hints on when she feels the US Federal Reserve should start to taper its monetary policies will be seized upon.

Last week’s jobs data brought the date forward in many people’s eyes, though current Fed chairman Ben Bernanke was again non –committal.

There was some hope for the fans of gold, as Ole Hansen, the head of Commodity Strategy at Saxo Bank, noted that after nine consecutive weeks of outflows from ETFs, the flow actually turned slightly positive last week.

According to Hansen, considering the non-friendly environment being created by the better-than-expected growth and employment data from the, US it may signal institutional investors have either left gold or reduced their exposure to acceptable levels.

If so, this would remove a key seller group seen over this past year.

Spot gold was trading flat at US$1,283, while silver eased to US$21.36 and platinum dropped US$11 to US$1,426.

Major movers

Randgold Resources down 23p at 4,712p

Fresnillo down 2p at 958p

Anglo American down 21p at 1,471p