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Gold heads for third weekly drop, firm equities weigh

Source : REUTERS
Last Updated: Fri, Apr 12, 2013 03:07 hrs
Gold bars are seen at a jewellery shop in Lucknow

Gold was barely changed on Friday, but was on track for a third straight weekly drop as strong stock markets lured investors seeking better returns while outflows from exchange-traded funds reflected the precious metal's shaky outlook.

FUNDAMENTALS

Gold was steady at $1,560.86 an ounce by 0040 GMT after falling to its weakest in nearly a week on Thursday.

The prices, which were headed for a more than 1 percent drop this week, have slipped around 7 percent so far this year after posting annual gains in the past 12 years.

U.S. gold for June delivery was at $1,561.10 an ounce, down $3.80.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.18 percent to 1,181.42 tonnes on Thursday from 1,183.53 tonnes on Wednesday.

Heavily indebted euro zone nations such as Italy and Portugal could come under pressure to put their bullion reserves to work as a result of plans for Cyprus to sell gold to meet its financing needs.

Fallout from the messy bailout of Cyprus will top the agenda of a two-day EU finance ministers meeting in Dublin beginning on Friday, with focus also on growing German reluctance over euro zone banking reform.

A Pentagon spy agency concluded for the first time that North Korea likely has the ability to launch nuclear-armed missiles, illustrating the high stakes surrounding the escalating tensions on the Korean peninsula.

MARKET NEWS

Asian shares crept higher and the yen faced fresh lows on Friday as the Bank of Japan's liquidity injections and Wall Street's record-high close overnight continued to underpin investor confidence.

U.S. stocks rose for a fourth straight day on Thursday, sending the Dow and the S&P 500 to new closing highs as positive data on the labour market and an encouraging retail outlook eased recent concerns about economic growth.





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