(Corrects the milestone in paragraph 9 to 1-1/2-week high from
one-month high)
* Gold may attract safe-haven flow if Europe slips into
crisis
* Spot gold targets $1,630/oz – technicals
* Coming up: U.S. housing starts, March; 1230 GMT
By Rujun Shen
SINGAPORE, April 17 (Reuters) – Gold edged down on Tuesday,
tracking the euro’s weakness as investors watched the Spanish
debt market with renewed worries about the debt crisis in
Europe, but safe-haven demand may lend support to bullion
prices.
Sentiment in the euro remained vulnerable ahead of a Spanish
debt auction later in the day. Spain is set to see its borrowing
costs leap when it sells short-term bonds after jitters over its
deficit and banking sector pushed longer term risk premiums
above 6 percent on Monday.
Analysts said gold’s safe-haven appeal may attract investors
again if the situation in Europe worsens.
“We expect that if European credit conditions continue to
deteriorate, gold (along with the dollar) could start to better
reflect the growing tensions by moving higher on its steam,”
said Ed Meir, an analyst at INTL FCStone in a research note.
Spot gold edged down 0.1 percent to $1,649.70 an
ounce by 0312 GMT, extending the price decline to a third
straight session. U.S. gold was little changed at
$1,650.80.
Technical analysis suggested that spot gold could fall to
$1,630 an ounce during the day, said Reuters market analyst Wang
Tao.
A stronger dollar may cap gains in gold and keep prices in a
range, especially as the U.S. economic recovery seems to be on
track, said Lynette Tan, an analyst at Phillip Futures in
Singapore.
“People may buy into the dollar as a safe haven, which
causes some kind of neutral trade in gold,” Tan said, “We are
looking at gold trade between $1,600 to $1,660.”
The dollar index rose to a 1-1/2-week high in the
previous session, weighing on dollar-priced commodities as they
become more expensive for buyers holding other currencies.
Investors will closely watch a policy meeting at the U.S.
Federal Reserve next week, seeking cues on the central bank’s
attitude towards monetary easing after a weaker-than-expected
March employment report released earlier this month fueled hopes
for stimulus measures.
Silver stockpiles in COMEX-monitored warehouses rose to
their highest level in at least 10 years, showing near-term
supply of the metal is plentiful as mine output holds at record
levels and the global economic recovery struggles for traction.
Spot silver traded flat at $31.43, off a one-week low
of $31.16 hit in the previous session.
Precious metals prices 0312 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1649.70 -1.90 -0.12 5.49
Spot Silver 31.43 -0.02 -0.06 13.51
Spot Platinum 1568.69 -0.31 -0.02 12.61
Spot Palladium 650.45 2.05 +0.32 -0.31
COMEX GOLD JUN2 1650.80 1.10 +0.07 5.36 5248
COMEX SILVER MAY2 31.43 0.05 +0.17 12.57 591
Euro/Dollar 1.3116
Dollar/Yen 80.48
COMEX gold and silver contracts show the most active months
(Editing by Sugita Katyal)
