London 02/04/2012 - Gold dropped in European trading on Monday morning, stuck in its prevailing $15 range and looking for direction in the short term.
The absence of China, which is out of the market for three days for the Ching Ming festival, and a shorter week in Europe and the US for the Easter break should result in little business in for the reminder of the week.
Spot gold was last down $4.40 at $1,663.90/1,664.70 per ounce. On the charts, a close above $1,666, where resistance is pegged, could provide a more positive short-term outlook. Meanwhile, support stands at $1,656 and $1,648.
"There is no indication to which side gold is leaning at the moment," Gerry Schubert, head of precious metals at Emirates NBD, said. "The result from the eurozone discussions could strengthen the euro and that could be positive for the gold price, at least in the short term."
Last Friday, eurozone finance ministers agreed in principle to increase temporarily the size of their bailout pot to 800 billion euros to combat the spread of the sovereign debt crisis.
And China's official PMI for March, published over the weekend, showed an encouraging move higher to 53.1 compared with an expected 50.9 and from a previous 51.
This has calmed investors' worries that the recent slowdown of Chinese growth could heavily affect the country's economy in the coming months but failed to boost sentiment in precious metals.
Today, investors will focus on the US ISM Manufacturing Index, which is due at 1500 BST.
In wider markets, the euro stabilised higher at 1.335 against the US dollar but European equity markets turned negative after a constructive start.
A new string of disappointing data came out this morning, with the Spanish manufacturing index for March falling to 44.5 from 45 in February - the lowest reading since December. The EU unemployment rate for February showed an increase to 10.8 percent, a new record high for the area.
On the downside, gold remains undermined by slow physical demand in major markets, with the strike by Indian gold jewellers entering its 17th day today.
The president of the Bombay Bullion Association (BBA) reportedly confirmed that gold imports will remain weak over the coming months after March saw just 15/20 tonnes coming in. Imports could total no more than 800 tonnes this year, down from 878 tonnes last year.
Moreover, the government increased the import tariff value of gold to $539 per ten grams from $530 previously.
Among other precious metals, silver rose 12 cents to $32.37/32.43 per ounce. Platinum fell $2 to $1,635.50/1,645.50 per ounce, while palladium also dropped $6.50 to $648/664 per ounce - the metal hit a 10-week low of $639.90 on Thursday.
"Platinum and palladium still lack the technical impetus but the fundamental picture looks supportive," broker Credit Suisse said. "Prices are likely to test the next technical resistance levels to the upside, but it will probably take several attempts before they will break to the upside."
| TIME | |||||
|---|---|---|---|---|---|
| Sydney | Tokyo | Ha Noi | HongKong | LonDon | NewYork |
| Prices By NTGOLD | ||
|---|---|---|
| We Sell | We Buy | |
| 37.5g ABC Luong Bar | ||
| 5,333.50 | 4,913.50 | |
| 1oz ABC Bullion Cast Bar | ||
| 4,426.80 | 4,026.80 | |
| 100g ABC Bullion Bar | ||
| 14,205.60 | 12,905.60 | |
| 1kg ABC Bullion Silver | ||
| 1,728.40 | 1,378.40 | |
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