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Gold down 1 pct to near 2-week low on firm dollar

Posted by Manish Agrawal on Wednesday, 3 December, 2008

SINGAPORE: Gold fell more than 1 percent on Wednesday, defying a rebound in oil prices, after the US dollar bounced against the euro and speculators in Japan shifted some of their money back to stocks. 
Investors await a series of economic data due out this week, including U.S. non-farm payrolls numbers on Friday, and interest rate decisions from centralbanks, which could give direction to the dollar and precious metals. 

Gold was trading at $776.90 an ounce, down $4.60 from New York’s notional close. It fell as low as $772.10 on Wednesday, not far from a near two-week low of $761.30 hit the previous day. 

Bullion has rebounded around 14 percent since falling to a 13-month low of $680.80 in October, but the upside was capped by recent weakness in oil, a firm dollar and worries about an increasingly bleak global economic outlook that could curb investors‘ appetite for risky assets. 

“The U.S. job data will be released and many people expect it to be very bad. The bear trend will continue for spot gold,” said Kazuhito Saito of Interes Capital Management in Tokyo, adding that some Japanese investors sold gold to buy stocks“It may fall below $750,” said Saito, referring to the current support level and the 30-day moving average. 

U.S. payrolls probably shed 316,000 jobs in November, following October’s drop of 240,000 jobs, according to economists polled by Reuters. The unemployment rate is seen rising to 6.8 percent in November from October’s 6.5 percent. 

The Nikkei rose 1 percent after tumbling to a near two-week low the day before.. Oil rose more than $1 a barrel on a technical rebound. 

The euro slipped to $1.2695 in thin trade ahead of interest rate decisions from the European Central Bank, the Bank of England and the Reserve Bank of New Zealand on Thursday. 

A Reuters survey showed prices of platinum, palladium and silver, which have significant industrial uses, are expected to slump next year as demand sags in line with economic growth.

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