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PRECIOUS-Gold rebounds on weaker equities, shrugs off U.S. data

Published 03/03/2016, 02:33 am
© Reuters. PRECIOUS-Gold rebounds on weaker equities, shrugs off U.S. data
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* Global shares lower as U.S. crude oil slips

* Dollar up 0.1 percent vs basket of currencies

* Feb U.S. ADP jobs data higher than expected (Updates prices, adds comment)

By Clara Denina

LONDON, March 2 (Reuters) - Gold rebounded on Wednesday as global shares turned lower after a fall in oil prices, shrugging off a steadier dollar following better-than-expected U.S. economic data.

Spot gold XAU= , lower initially, rose 0.5 percent to $1,237.71 an ounce by 1515 GMT, while U.S. gold futures GCcv1 for April delivery were up 0.5 percent at $1,237.10 an ounce.

Bullion, seen as a shelter for risk-averse investors, has rallied about 16 percent this year in the face of tumbling equities and fears of a global economic slowdown.

"We are still in the phase of investors filling their boots and that means the retracement we are seeing in gold is likely to be used as a buying opportunity," Saxo Bank senior manager Ole Hansen said.

On Wednesday, gold had started the day on the back foot along with other assets perceived as safer, including the Japanese yen, due to a rally in stock markets.

But a retreat in stocks after oil prices slipped generated renewed demand for the metal.

Gold rebounded even as the dollar gained 0.1 percent against a basket of currencies, after data showed the U.S. private employers added 214,000 jobs in February, above economists' expectations. will be watching more U.S. data to gauge the impact on stocks and the Federal Reserve's monetary policy, with the most important release being non-farm payrolls on Friday.

While gold faces firm resistance at $1,250-$1,260, "the market has built a solid and supportive base above $1,200" and there is enough risk sentiment and uncertainty to support the metal, HSBC said in a note.

"Elevated uncertainty among market participants is usually positive for gold, which is seen as a safe haven," Commerzbank (DE:CBKG) analyst Daniel Briesemann said.

"Gold is definitely well supported by ETF inflows...as long as these continue, then gold should be in demand and the gold price could easily gain more ground."

Flows into bullion-backed exchange-traded funds (ETFs) continued to increase. Assets in SPDR Gold Trust GLD , the world's top gold ETF, rose 1.15 percent on Tuesday to 786.20 tonnes, the highest since September 2014.

Among other precious metals, platinum XPT= fell 0.6 percent to $936.20 an ounce, while silver XAG= gained 0.7 percent to $14.93 and palladium XPD= dropped 0.6 percent to $512.96.

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