Gold Trades Near Seven-Week Low as Demand Weighed Against Data

London (Apr 3)   Gold traded near a seven-week low in London as investors weighed improving U.S. data that adds to the case for reduced stimulus against signs of more physical demand.

Australia & New Zealand Banking Group Ltd.’s physical gold demand gauge accelerated toward the end of March, analysts from the bank wrote in a note today. Bullion rose 0.9 percent yesterday, after reaching $1,277.79 an ounce on April 1, the lowest since Feb. 11

Federal Reserve Chair Janet Yellen said last month the central bank may end bond buying this fall and increase borrowing costs six months after that, before this week saying that “considerable slack” in labor markets showed that accommodative policies will be needed for “some time.” U.S. data tomorrow may show stronger jobs growth after a private report yesterday showed companies increased hiring last month.

“Physical demand is good, not exceptional, so it’s difficult to see the upward momentum being sustained,” said Zhu Siquan, an analyst at GF Futures Co., a unit of the Guangzhou- based company that bought Natixis Commodity Markets Ltd. “Investors should remain sidelined before the payrolls data.”

Bullion for immediate delivery fell 0.2 percent to $1,287.41 by 9:23 a.m. in London, according to Bloomberg generic pricing. Gold for June delivery was 0.3 percent lower at $1,287.50 on the Comex in New York. Futures trading volume was 28 percent below the average for the past 100 days for this time of day, data compiled by Bloomberg showed.

“Gold’s recent decline is prime for a rebound, but is likely to falter before $1,320, making for a neutral near-term technical view,” Australia & New Zealand Banking Group Ltd. wrote in the report.

U.S. Jobs

The Labor Department will probably say tomorrow U.S. employers added 200,000 jobs last month, versus 175,000 in February, according to economists surveyed by Bloomberg News.

In India, which ceded its spot as the largest gold consumer to China last year after restricting imports, central bank Governor Raghuram Rajan said yesterday small steps in easing gold import curbs can’t be ruled out.

Silver for immediate delivery was little changed at $19.9667 an ounce in London. Platinum was little changed at $1,437.75 an ounce, after touching $1,445.44, the highest since March 21. Palladium too was little changed, at $786.56 an ounce. Prices climbed to $801.53 on March 24, the highest since August 2011.

The Association of Mineworkers and Construction Union led more than 70,000 workers on strike in South Africa since Jan. 23 at mines of the biggest platinum producers. Lonmin Plc declared force majeure over mining goods and services and the company will only buy metal on the open market for customer needs as a “last resort,” said Chief Executive Officer Ben Magara.

Source: Bloomberg