Thursday 28 Mar 2024
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LONDON (Nov 10): Gold fell on Monday as a short-covering rally that boosted prices from 4-1/2-year lows lost steam, with buyers still wary that rising stock markets, upbeat U.S. data and softening investment flows would spell further falls.

The metal rebounded from an early low of $1,131.85 an ounce on Friday after U.S. payrolls data marginally missed expectations. Prices jumped 3.1 percent, their biggest one-day rise since June 19.

That move petered out early on Monday. Spot gold was down 0.6 percent at $1,171.80 an ounce at 0919 GMT, while U.S. gold futures for December delivery were up $1.60 an ounce at $1,171.40.

"We've had a bit of a bounce and I think we're going to go sideways for a while, but at the moment the risk is the downside," Simon Weeks, head of precious metals at Bank of Nova Scotia, said.

"There are a lot of people who'd prefer to see positive economic data, and see equities higher, and see ETFs lower, and I don't think anything's going to change that in the short term," he said. "The market still looks vulnerable."

Investment interest in gold has been lacklustre, as firmer equities detracted interest from the metal. A deal giving global investors easier access to China's stock market lifted world shares to their highest in over a month on Monday.

Hedge funds and money managers slashed bullish bets in gold futures and options to a four-week low after prices tumbled, data showed on Friday.

The largest gold-backed exchange-traded fund, SPDR Gold Shares, said its holdings fell 5.7 tonnes on Friday, its biggest one-day outflow in nearly three weeks. October saw its biggest monthly outflow this year.

There was little support from physical gold demand in top consumer China, with heavy volumes of buying and selling seen on the Shanghai Gold Exchange overnight. Chinese premiums ranged between $1 and $2 on Monday, steady from Friday.

Silver was down 0.6 percent at $15.68 an ounce, spot platinum was down 0.2 percent at $1,210.25 an ounce, and spot palladium was down 0.1 percent at $766.97 an ounce.

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