PRECIOUS-US gold slides as Greece worries linger
10/02/2012 at 05:01
* CME cuts gold, silver, platinum margins * Spot gold may fall to $1,698/oz - technicals * Coming up: U.S. Int'l trade, Dec; 1330 GMT Writes through; adds details; updates prices By Rujun Shen SINGAPORE, Feb 10 Reuters - U.S. gold fell more than 1 percent on Friday, weighed down by a weaker euro, as investors worried about the fate of Greece's bailout deal and chose to ignore a margin cut in U.S. gold contractsSpot gold
U.S. gold tumbled as much as 1.4 percent to $1,717.2, before paring some losses to $1,722.90. Traders said the rapid decline was triggered by stop-loss selling as prices approached $1,725
Spot gold was also headed for a 0.4-percent weekly fall, its second consecutive week of declines, after following the ups and downs of Greece's struggle to agree to reforms and austerity measures in exchange for an economic rescue package
Although Greek political leaders clinched a deal at the last minute, the bailout is still pending approval of international lenders, keeping investors guessing and pulling the euro off two-month highs against the dollar and the yen
Even a cut in COMEX gold trading margins by the biggest operator of U.S. futures exchanges, the CME Group, failed to spark investors' enthusiasm
"Many are still standing on the side waiting for something new to happen in the market," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong
"COMEX cut margins probably because the market volatility was low and people didn't have much interest," he added
The CME Group on Thursday lowered trading margins for a range of commodities contracts, including gold, silver and platinum, effective after the close of business on Monday. This is the first margin cut for COMEX gold since June 2011
Technical analysis suggested spot gold could fall to $1,698 during the day, Reuters market analyst Wang Tao said. < Gold 24-hour technical outlook: Gold-platinum premium hovers near a four-month low: FACTBOX - CME gold margin changes since 2009 > Asia's physical market remained subdued, as the tight range in prices sapped trading interest, dealers in Hong Kong and Singapore said
"My phone hasn't rung for a long while," said a Singapore-based dealer. "Unless prices break above $1,755 or below $1,700, physical buyers aren't interested." Traders feel reluctant to make bullish bets for now, but analysts said gold remains a solid longer-term investment due to the murky economic outlook and geopolitical tensions
SPDR Gold Trust , the world's biggest gold-backed exchange-traded fund, reported that its holdings increased to 1,278.344 tonnes by Feb. 9, the highest level since late December
The total amount of gold held by gold ETFs was little changed from a week earlier, after four weeks of gains.
Concerns about supply shortfalls in South Africa, the world's top producer of the metal, may continue to support platinum prices and lower its discount to gold, analysts said. Precious metals prices 0819 GMT Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1720.34 -10.66 -0.62 10.01 Spot Silver 33.60 -0.28 -0.83 21.34 Spot Platinum 1644.50 -7.49 -0.45 18.05 Spot Palladium 701.72 -5.03 -0.71 7.54 COMEX GOLD APR2 1722.90 -18.30 -1.05 9.96 28236 COMEX SILVER MAR2 33.67 -0.25 -0.74 20.60 5243 Euro/Dollar 1.3255 Dollar/Yen 77.63 COMEX gold and silver contracts show the most active months Editing by Miral Fahmy rujun.shen@thomsonreuters.com+65-6870-3726Reuters Messaging: rujun.shen.thomsonreuters.com@reuters.net Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit * BridgeStation : view story .134 * Reuters Plus : from your WebDSS screen For more information on Top News, visit Reuters Terminal users can see related news and prices by double clicking on the codes in brackets: - All precious metals headlines - Precious metals market reports - Daily fixing headlines - Indian gold reports - European gold prices - London interbank gold forward rates