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PRECIOUS-Gold struggles on dollar, fails to benefit from falling equities

Published 2015-09-02, 02:43 a/m
© Reuters.  PRECIOUS-Gold struggles on dollar, fails to benefit from falling equities
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* Gold steady after four-day advance
* Asian stocks retreat on global growth worries
* Coming Up: U.S. ADP national employment; 1215 GMT

(Updates prices)
By Manolo Serapio Jr
MANILA, Sept 2 (Reuters) - Gold steadied on Wednesday with
appetite for the metal soured by a firmer dollar despite weaker
Asian equities, and failure to breach a key resistance and a
looming U.S. rate hike suggest more downside risk.
Asian stocks sagged after sharp overnight losses on Wall
Street, fed by worries over weak Chinese manufacturing data.
Chinese stocks fell again in a seesaw session despite pledges by
a number of brokerages to increase their stock investment to
support the market.
Spot gold was flat at $1,140.70 an ounce by 0624 GMT,
after touching a one-week high of $1,147.16 on Tuesday.
Gold has failed to convincingly breach the $1,145 resistance
even in the face of a 3 percent slide in U.S. stocks on Tuesday,
said Howie Lee, analyst at Phillip Futures in Singapore.
"This suggests that in the short term, stock market meltdown
or no meltdown, gold prices are unwilling to move above $1,145
(and) it will take a way stronger catalyst, say a very weak
nonfarm payrolls number this Friday, to substantially bring
prices (higher)," Lee wrote in a note to clients.
A U.S. private employment report later in the day could give
a rough guide on the wider nonfarm payrolls data on Friday.
Some economists say strong employment growth in August could
help cement expectations that the Federal Reserve will raise
interest rates for the first time in nearly a decade at its next
meeting on Sept. 16-17.
Boston Fed President Eric Rosengren said the U.S. central
bank will probably only gradually raise interest rates,
irrespective of whether it decides to take the first step a few
months earlier or later.
Non-interest bearing gold has been hit by a looming hike in
U.S. interest rates, shifting funds to the dollar. But some
analysts say the dollar could also be prone to profit-taking
when the Fed does raise rates, which should support gold.
Tuesday marked spot gold's fourth day of gains, but
technical analysts at ScotiaMocatta said "it is hard to get too
bullish considering the falls are more significant than the
bounces."
"We believe this is a consolidation situation with only a
breach of $1,168 bringing in fresh buying," they said.
U.S. gold for December delivery GCcv1 was flat at
$1,140.20 per ounce.
Spot silver XAG= was also steady at $14.57 an ounce,
palladium XPD= gained 0.7 percent to $571.55 and platinum
XPT= rose 0.5 percent to $1,005.50.

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