Gold slips toward $1,650 as Spain gets debt downgrade

By Jan Harvey From http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=150317&sn=Detail&pid=34

Gold prices slipped back towards $1,650 an ounce on Friday, ending the metal's three-session rally, as a ratings downgrade of debt-laden Spain pressured the euro, and consumers in major Asian bullion-buying centres shunned the precious metal.

"The euro/dollar has held above $1.30 for some time, in the $1.30-$1.32 range, which coincides with gold also being caught in a range," Societe Generale analyst Robin Bhar said. "If the euro zone crisis deepens and we see the euro/dollar correct below $1.30, that could give a bit of a lift to gold."

Safe-haven German bund futures rose to record highs, while Spanish 10-year bond yields broke above 6 percent.

"The downgrade of Spain by S&P has focused attention again on the euro zone problems and may cap gold's advance if the euro stays in the doldrums," Marex Spectron said in a note.

"U.S. figures out today include GDP and Personal Consumption at 1330 BST and the University of Michigan Confidence figure at 1455 BST," it added. "Keep an eye on these for clues as to what the afternoon will bring us."

ASIAN BUYERS UNINSPIRED

Physical demand for the metal in major consumer India was light after the last key gold-purchasing festival of the wedding season earlier this week, while the listless performance of spot prices deterred interest of buyers elsewhere in Asia.

Gold bar premiums in Singapore were around $1 an ounce above London prices, while in Hong Kong, premiums were quoted in the range between $1 and $1.60 an ounce.

"People don't have much confidence that prices will move higher once we approach (the) $1,660-$1,670 level," a Hong Kong-based dealer said.

He said trading volume has been sluggish as speculators shifted interest to better-performing markets, such as equities.

Among other precious metals, silver was up 0.2 percent at $31.14 an ounce.

The metal is set to end the week down 1.8 percent after sliding below $30 an ounce for the first time since mid-January on Wednesday. Prices fell in six of the previous eight weeks.

From: http://www.mineweb.com/mineweb/view/mineweb/en/page34?oid=150317&sn=Detail&pid=34