London 29/03/2012 - Gold fell in afternoon trading on Thursday on fresh eurozone economy fears that weakened the euro at the expense of the dollar.
Spot gold was last down $15.05 or around 0.9 percent on yesterday’s close at $1,646.25-1,645.80 per ounce, close to its intraday low of $1,645.00.
“Market participants are returning their attention to the eurozone and the possibility of further fiscal problems in the region and, for now, the focus is on Spain,” Standard Bank said.
Unionised workers in Spain have gone on strike to protest against government budget cuts and reforms ahead of a new budget on Friday. The country's unemployment rate is running at around 23 percent.
"Also comments from S&P overnight once again brought Greece’s rating into question, highlighting the high risks and inflexibility of the current plan," the bank added.
Ratings agency Standard & Poor's warned that Greece may need to restructure its debt a third time even after the country only recently won approval for a 130-billion-euro bailout programme.
And the Organisation for Economic Cooperation and Development (OECD) forecast average first-half growth in the eurozone's developed economies at an annualised 1.9 percent, lagging behind growth of 2.9 percent and 2.8 percent in the US in the first two quarters.
Still, US data disappointed. Initial claims for state unemployment benefits came in at a seasonally adjusted 359,000, which was worse than expectations of a 350,000 reading. Additionally, the prior week's figure was revised upwards to 364,000 from the previously reported 348,000.
In wider markets, the euro was trading at 1.3259 against the US dollar, close to an intraday low of 1.3250.
Although the generally downbeat sentiment might have been expected to heighten gold's safe-haven appeal, the market remains subdued, a trader said.
“The banking sector not showing any real interest, investors have lost interest in the market and I don't see real demand,” he said.
Next week, market attention will focus on global PMI figures, with Chinese data scheduled for release this coming weekend.
Indian demand was still weak while the strike by goldsmiths and jewellers in the northern area of the country entered a second week, while shops in the south are now partially open.
"There is valid concern over Indian gold demand which may decline on the back of higher domestic taxes on the gold industry," Standard Bank said.
Earlier this month, the Indian government doubled the import duty on the metal to four percent. This comes after January's increase to 2.06 percent of gold's value from a previous flat rate of 30,900 rupees per net kilogram.
But physical demand is expected to pick up in April because of the Akshaya Tritiya festival - the second-most important festival for gold buying - at the end of the month.
Among other precious metals, silver 30 cents to $31.71-31.75 per ounce, platinum fell $16 to $1,619-1,628 - the metal touched a one-week high of $1,667.80 on Tuesday - and palladium fell $12 to $634.02-650.
| TIME | |||||
|---|---|---|---|---|---|
| Sydney | Tokyo | Ha Noi | HongKong | LonDon | NewYork |
| Prices By NTGOLD | ||
|---|---|---|
| We Sell | We Buy | |
| 37.5g ABC Luong Bar | ||
| 4,533.70 | 4,203.70 | |
| 1oz ABC Bullion Cast Bar | ||
| 3,772.50 | 3,452.50 | |
| 100g ABC Bullion Bar | ||
| 12,036.20 | 11,106.20 | |
| 1kg ABC Bullion Silver | ||
| 1,536.00 | 1,186.00 | |
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