Gold slips for third session as stocks, dollar strengthen

by **Cals** Tue 20 Oct 2015, 00:28

Update

[size=28]Gold slips for third session as stocks, dollar strengthen

By Reuters / Reuters | October 19, 2015 : 9:03 PM MYT

LONDON/SINGAPORE (Oct 19): Gold fell on Monday as a rebound in stocks and strength in the dollar pulled the metal further from last week's 3-1/2 month high, though prices remained underpinned by uncertainty over the timing of a U.S. rate rise.

Spot gold was down 0.4% at US$1,171.95 an ounce at 1202 GMT, while U.S. gold futures for December delivery were down US$11.00 an ounce at US$1,172.10. Last week the metal hit its highest since late June at US$1,190.63 an ounce.

Gold rose more than 7% to last week's peak, after U.S. jobs data on Oct 2 disappointed financial markets, prompting investors to dial back expectations for an imminent increase in U.S. interest rates.

Analysts say the move showed signs of becoming overstretched. Hedge funds and money managers raised their bullish bets in COMEX gold and silver to near five-month highs in the week ended Oct 13, U.S. Commodity Futures Trading Commission data showed on Friday.

"The biggest threat to gold right now is the big jump in speculative long bets during the past couple of weeks," Saxo Bank's head of commodities research Ole Hansen said.

"It did not take long for the ECB either to come out on the attack against the rising euro and the EUR/USD retracement since then has also sapped confidence a bit."

The dollar rose against the euro on Monday as investors waited to see whether the European Central Bank would unveil more stimulus plans at a meeting this week.

European stocks climbed after Chinese economic growth data marginally beat expectations, calming months of concerns over the prospect of a hard landing in the world's second-largest economy.

The world's largest gold-backed exchange-traded fund, New York-listed SPDR Gold Shares, reported its first outflow in over a week on Friday, of 6.3 tonnes.

Silver was down 1.5% at US$15.81 an ounce, while platinum was flat at US$1,011.75 an ounce and palladium was down 1.2% at US$684.72 an ounce.

Platinum hit its highest since late August on Friday, after tumbling to 6-1/2 year lows earlier this month on theVolkswagen emissions scandal, which some feared could cut demand for diesel engines, and catalytic converters that contain the metal.
"While it is too early to quantify the impact of the VW scandal on diesel vehicles and platinum demand, we highlight that lower prices have reinvigorated jewellery interest in platinum," Standard Chartered said in a note. "China's platinum imports bounced back in August."

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