MANILA, July 22 (Reuters) - Gold struggled to move away from
a five-year low on Wednesday, reflecting sustained pressure on
the metal days after its steepest fall in almost two years, with
more losses seen ahead as the demand outlook dims.
India is not rushing to pick up the slack in Chinese demand
as would-be buyers wait for further price declines, as a wedding
season lull and poor rains curb appetite. ID:nL3N10135T
FUNDAMENTALS
* Spot gold XAU= was little changed at $1,101.28 an ounce
by 0046 GMT, not far above Monday's trough of $1,088.05 when
bullion slid as much as 4 percent in a selloff exacerbated by
huge volumes traded on the Shanghai Gold Exchange.
* U.S. gold for August delivery GCcv1 slipped 0.3 percent
to $1,100.50 an ounce.
* Investors are finding less reason to hold gold as a safe
haven following the global financial crisis, with the dollar
strengthening before what is expected to be the first rate
increase by the U.S. Federal Reserve in nearly a decade.
* While bullion's slump is heaping new pressure on an
already stressed gold mining industry, mine closures are not
expected to happen quickly as operators instead try to reduce
costs to keep operations going. ID:nL1N1011UL
* But the steep price slide threatens to squash a run of
mining mergers and acquisitions just as momentum in the sector
was picking up. Mining executives and fund managers warn
predators will turn more cautious before splashing out cash or
approving capital raisings, at least until bullion shows signs
of stabilising. ID:nL3N101641
* Gold no longer has the allure it once had for funds, as a
failure to perform when its price was expected to rise and
recent volatility, prompt them to seek returns and protection
elsewhere. ID:nL5N1013N2
* Holdings of SPDR Gold Trust GLD , the world's largest
gold-backed exchange-traded fund, fell further to 22.17 million
ounces on Tuesday, the lowest since August 2008.
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MARKET NEWS
* The dollar nursed losses after taking its biggest one-day
fall so far this month, though most observers felt it was just a
hiccup in the currency's long-term uptrend. USD/
* Asian stocks got off to a bumpy start after earnings
dragged down U.S. equities. MKTS/GLOB
DATA AHEAD(GMT)
0645 France Business climate July
1300 U.S. Monthly home price index May
1400 U.S. Existing home sales June