Gold falls on global growth prospects

Frankfurt (Jan 16)  Gold fell on Wednesday as strong US data and optimistic global growth prospects prompted a rally in the dollar and equities, drawing interest away from the metal.
Spot gold eased 0.5 percent to $1,238.10. It posted a 0.7 percent loss on Tuesday after touching a one-month peak of $1,255.00 earlier in the day. A disappointing US jobs report last week stoked speculation the US Federal Reserve would remain very cautious on the pace of its stimulus tapering and provided a boost to gold.
But strong US retail sales data on Tuesday and the first rise in the World Bank’s forecast for global economic growth in three years lifted equity markets. US gold futures for February delivery were down $8.00 to $1,237.30 an ounce. “Gold is giving back some of the strength seen over the past week, with quite a significant level of resistance above the $1,255 level,” Saxo Bank senior manager Ole Hansen said.
Markets are now closely watching data to gauge whether the central bank will deepen the cuts. As a gauge of investor sentiment, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 3.56 tonnes to a five-year low of 789.56 tonnes on Tuesday. In the physical markets, premiums on the Shanghai Gold Exchange for 99.99 percent purity gold remained largely steady at about $13 an ounce.
Silver fell 0.6 percent to $20.09 an ounce. Spot platinum dropped 0.8 percent at $1,414.75 an ounce, while palladium was unchanged at $733.25 an ounce.