Gold prices drifts around $1,575/oz,Wall Street rally weighs

Spot gold edged up 0.1% to $1,577.05 announced by 0037 GMT.

Written by Reuters | Singapore | Published:March 6, 2013 10:07 am

Gold hovered around $1,575 an ounce on Wednesday,languishing in a recent range as a strong stock market performance drew the attention of investors who have become more confident in the economic growth outlook.

The Dow Jones industrial average hit a record high in the previous session,boosted by latest data showing growth in the huge U.S. services sector rising to its fastest pace in a year,adding to evidence of economic recovery.

FUNDAMENTALS

Spot gold edged up 0.1 percent to $1,577.05 announced by 0037 GMT,drifting within a recent range between $1,564 and $1,587. U.S. gold was also up 0.1 percent,to $1,576.80. South Korea’s central bank said on Wednesday it bought 20 tonnes of gold in February in the fifth purchase of the metal in less than two years,taking total holdings to 104.4 tonnes.

More and more major banks are breaking away from the consensus for continued gains in gold prices as an incipient return to growth of the global economy has undermined the argument for holding the precious metal. Holdings of SPDR Gold Trust,the world’s biggest gold-backed exchange-traded fund,dropped for an eleventh consecutive session to a 16-month low of 1,244.855 tonnes on March 5. The fund had seen an outflow of 105.965 tonnes so far this year,compared with a 96.25-tonne inflow in 2012.

The U.S. Congress is moving rapidly to pass legislation funding the federal government through Sept. 30,as Senate leaders on Tuesday expressed eagerness to avoid any threat of agency shutdowns when money runs out on March 27.

Workers went on a wildcat strike on Tuesday at Lonmin’s Marikana platinum mine in South Africa. Thirty-four miners were killed at the mine last year during a violent clash between miners and police. Spot platinum rose to a one-week high of $1,608 on Tuesday,before easing to $1,592.99 For the top stories on metals and other news,click

MARKET NEWS

The Dow Jones industrial average soared to a record closing high on Tuesday,breaking through levels last seen in 2007 as investors rushed in to join the party in anticipation of more gains.The euro struggled to gain ground on Wednesday with investors sidelined ahead of a European Central Bank policy meeting,but commodity currencies made the most of improved risk appetite that saw the Dow Jones hit a record-closing high.

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