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PRECIOUS-Gold Pares Losses, but Equities Lure Investors
Apr 9,2013 16:22CST
industry news
Gold pared early losses on Tuesday as jewellers and speculators looked for bargains.

* Spot gold to drop to $1,555 -technicals
* Coming Up: U.S. ICSC weekly chain store sales; 1145 GMT

SINGAPORE, April 9 - Gold pared early losses on Tuesday as jewellers and speculators looked for bargains, but the metal was under downward pressure after U.S. stocks gained ahead of an earnings season that is expected to show modest growth.
Speculators have also slashed their gold net longs as the precious metal -- typically seen as a safe-haven asset -- ignored tensions on the Korean peninsula and investors moved their money to equities, seeking better returns, despite concerns about the health of the U.S. economy.
Gold fell to as low as $1,569.94 an ounce and stood at $1,576.00 by 0628 GMT, up $ 2.91. It plunged to a 10-month low last week after an unprecedented monetary stimulus from the Bank of Japan and hopes for another European Central Bank rate cut failed to stem heavy selling of bullion by funds.
"I can say the chart point doesn't look good. The bond and stock markets are more interesting than gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.
"I think $1,585 is the crucial point. If it can break above this level, another bull run or short covering will push up the market to $1,600."
Gold rallied to an 11-month high in October last year after the U.S. Federal Reserve announced its third round of aggressive economic stimulus, raising fears the central bank's money-printing to buy assets will stoke inflation.
Gold has dropped around 6 percent so far this year after having posted annual gains in the past 12 consecutive years.
U.S. gold for June delivery was at $1,576.10 an ounce, up $3.60.  
Institutional investor George Soros said gold had been destroyed as a safe-haven asset, but added that he expects continued central bank buying to support prices, the South China Morning Post reported.

"I've seen quite good buying from Thailand after a holiday yesterday. I would say the purchases are from a mix of buyers, such as jewellers and speculators," a physical dealer in
Singapore said.
"But some say gold may still test below $1,555. So that's why some people may want to wait for gold to test that level before buying."
Despite the buying interest, premiums for gold bars were little changed in Singapore at $1.20 to the spot London prices, and dealers were yet to see a pick up in demand in main consumer India ahead of the wedding season.
In other markets, the yen fell to multi-year lows on the back of the Bank of Japan's aggressive reflationary campaign, and shares in Asia drew support from a solid start to the U.S. quarterly earnings season.
A weak yen lifted the most active gold contract on Tokyo Commodity Exchange to its highest since Feb. 8 – not far off a record high of 5,081 yen a gram hit the same month.
Just like spot gold, Tokyo futures have ignored geopolitical tensions in North Asia.
North Korea warned foreigners in South Korea on Tuesday to quit the country because they were at risk in the event of conflict, the latest threat of war from Pyongyang.
Soaring tensions on the peninsula have been fuelled by North Korean anger over the imposition of U.N. sanctions after its last nuclear arms test in February, creating one of the worst crises since the end of the Korean War in 1953.
"Maybe this guy is too young to be taken seriously," the physical dealer in Singapore said of North Korea's 30-year-old leader, Kim Jong-un, in a bid to explain why the tension has not driven investors to gold. 
  Precious metals prices 0628 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1576.00    2.91   +0.18     -5.88
  Spot Silver        27.40    0.15   +0.55     -9.51
  Spot Platinum    1543.25   11.25   +0.73      0.54
  Spot Palladium    733.22    3.22   +0.44      5.96
  COMEX GOLD JUN3  1576.10    3.60   +0.23     -5.95        12449
  COMEX SILVER MAY3  27.36    0.22   +0.80     -9.51         4994
  Euro/Dollar       1.3021
  Dollar/Yen         98.97
  COMEX gold and silver contracts show the most active months


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