* China Q3 GDP up 7.4 pct on year as expected
* Gold may face more pressure in short term
* Coming up: European Council meeting (to Oct. 19
(Adds details, comments; updates prices)
By Rujun Shen
SINGAPORE, Oct 18 (Reuters) – Gold traded flat on Thursday,
retaining gains from the previous two days, as investors looked
for fresh leads from a European Union summit after shrugging off
data showing China’s economy slowed for a seventh quarter as
expected.
European leaders will gather for a two-day meeting amid
talks that Spain will seek a bailout next month, as the bloc
continues its struggle with the debt crisis.
Gold has closely followed the moves in the currency market,
with improving sentiment around the euro zone giving support to
the euro and weighing on the dollar, making dollar-priced
commodities more attractive for buyers holding other currencies.
China’s economy slid into its seventh straight quarter of
slowdown in July-September quarter, growing at 7.4 percent on
the year as expected, and Beijing said the country will be able
to beat or exceed the annual growth target of 7.5
percent.
Investors have expected more policy clarity from Beijing
after the leadership transition next month among speculation
that China will launch more stimulus measures to help boost
growth.
Prices of bullion dipped to below $1,730 earlier in the week
under the pressure of uncertainty over Spain’s bailout plan and
improvement in U.S. economic data which triggered concerns about
the extent of the latest stimulus measures.
“In the short term, the $1,730 support level will continue
to feel a lot of pressure as investors focus on the euro zone
summit,” said Chen Min, an analyst at Jinrui Futures in the
southern Chinese city of Shenzhen.
“But beyond that, gold’s outlook is still bullish thanks to
support from the easing measures by central banks.”
Spot gold traded nearly flat at $1,750 an ounce by
0320 GMT.
U.S. gold also was little changed at $1,751.50.
“Some buyers are coming back, thinking the sell-off is
over,” said a Hong Kong-based trader. “But we may see another
correction since the positioning in gold is still very high.”
Net length in U.S. gold hit a 14-month high of 198,194
contracts last week, more than doubled from this year’s trough
in late-July.
Holdings of gold-backed exchange-traded funds
stood at 74.804 million ounces, not far off a
record of 75.03 million ounces hit last week, suggesting strong
investment demand in gold.
Precious metals prices 0320 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1750.00 0.31 +0.02 11.91
Spot Silver 33.17 0.01 +0.03 19.79
Spot Platinum 1667.24 8.04 +0.48 19.69
Spot Palladium 649.60 1.00 +0.15 -0.44
COMEX GOLD DEC2 1751.50 -1.50 -0.09 11.79 5583
COMEX SILVER DEC2 33.22 -0.01 -0.04 19.00 2013
Euro/Dollar 1.3106
Dollar/Yen 79.18
COMEX gold and silver contracts show the most active months
(Editing by Ed Davies)
