* Worries about Spain keep pressure on euro, gold
* Spot gold technical signals mixed
* Coming Up: U.S. consumer confidence, May; 1400 GMT
(Adds comments, details; updates prices)
By Rujun Shen
SINGAPORE, May 29 (Reuters) – Gold traded little changed on
Tuesday, after attempts to breach the resistance at $1,580 an
ounce stalled as Spain’s deepening crisis rekindled worries
about euro zone finances, sending the single currency to near
its two-year low against the dollar.
Bullion has fallen more than 5 percent so far this month, on
course for its biggest monthly decline since December, as fear
of Greece’s exit from the euro zone sank the single currency and
boosted the dollar index to a 20-month high, weighing on gold
priced in the greenback.
The impact of a strong dollar more than offset gold’s
safe-haven appeal, especially as the prospect of further
monetary easing by the U.S. central bank in the near term has
dimmed.
“If Spain ended up seeking an international bailout, it
would trigger more panic than Greece,” said Li Ning, an analyst
at Shanghai CIFCO Futures.
“Such concern is reflected in the enormous pressure at the
$1,600 level, as the dollar index appears to retain an uptrend.”
Gold has attempted to breach that resistance level a few
times over the past week or so without success, which could in
turn send prices lower, she cautioned.
Spot gold was little changed at $1,573.89 an ounce by
0259 GMT, retreating from a one-week high of $1,583.50 hit the
previous session.
U.S. gold edged up 0.3 percent to $1,573.60.
As a sign of persistent worries about Spain’s finances, the
country’s 10-year borrowing costs rose to near the dangerous
7-percent level, and the risk premium on Spanish government debt
over German Bunds hit a euro-era high, as investors sought
refuge in assets perceived to be low-risk.
Trading was anaemic, as investors await the key U.S.
non-farm payrolls data and China official purchasing managers
index data later in the week, for clues to how the world’s top
two economies have performed during the euro zone turmoil.
“People don’t know where things might go and the physical
market is quiet,” said a Singapore-based dealer, adding that
buying from both China and India had been slow.
Potentially supportive of platinum group metals demand,
China may soon resume paying subsidies to rural residents who
trade in old vehicles for new, fuel-efficient ones, in an effort
to rekindle demand amid a slowdown in the world’s largest auto
market.
Spot platinum edged down 0.2 percent to $1,428.74,
and spot palladium lost 0.3 percent to $599.90. Palladium
was the worst performer in the precious metals complex with an
8-percent year-to-date decline.
Current platinum prices could endanger investment plans to
allow platinum miner Lonmin to ramp up production at key
shafts and slash unit costs, the chief executive of the world’s
third-largest producer of the precious metal said.
Precious metals prices 0259 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1573.89 1.11 +0.07 0.65
Spot Silver 28.43 0.03 +0.11 2.67
Spot Platinum 1428.74 -3.31 -0.23 2.57
Spot Palladium 599.99 -1.83 -0.30 -8.05
COMEX GOLD JUN2 1573.60 4.70 +0.30 0.43 63284
COMEX SILVER JUL2 28.41 0.02 +0.08 1.77 11539
Euro/Dollar 1.2534
Dollar/Yen 79.42
COMEX gold and silver contracts show the most active months
(Editing by Clarence Fernandez)
