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PRECIOUS-Gold heads for best month in a year as US data disappoints

Published 29/01/2016, 12:04 pm
© Reuters.  PRECIOUS-Gold heads for best month in a year as US data disappoints
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MANILA, Jan 29 (Reuters) - Gold steadied on Friday after recent gains that lifted the metal to its highest since November, keeping it on track to end January with its strongest monthly climb in a year.

Fresh data released on Thursday showed new orders for U.S. durable goods posted their biggest drop in 16 months in December, suggesting that growth in the world's top economy braked sharply at the end of 2015. Spot gold XAU= was little changed at $1,114.01 an ounce by 0041 GMT. Profit-taking on Thursday caused bullion to retreat from a 12-week high of $1,127.80 reached the previous day. For the month, gold was up 5 percent, its biggest such gain since January last year.

* Gains on Wednesday were spurred by the Federal Reserve's statement where it acknowledged the challenges facing the global economy and financial markets.

* The U.S. central bank has now put the world on notice that the slide in oil prices and sharp slowdown in global growth may be capable of changing the Fed's bias from implying a steady set of future rate hikes to one pointing to an extended pause or even a rate cut driven by stubbornly low inflation. The weak durable goods orders for December underlines expectations that the Fed's tightening cycle could be on hold. The data comes ahead of U.S. fourth-quarter gross domestic product due later on Friday.

* Economists polled by Reuters suggest U.S. GDP growth of 0.80 percent in October-December and annual expansion of 2.5 percent in 2016. ECON

* U.S. gold for February delivery GCcv1 was off 0.1 percent at $1,114.50 an ounce.

* With gold holding firm as oil prices tumbled to their lowest since 2003 this month, an ounce of bullion reached the equivalent in price of nearly 40 barrels of Brent crude oil LCOc1 - more than at any time since 1986. The official London benchmark price for silver settled on Thursday more than 80 cents below the spot price, sparking concern among traders who say it is too easy for the benchmark to deviate from the current spot price. For the top stories on metals and other news, click TOP/MTL or GOL

MARKET NEWS

* Asian shares got off to a tentative start after oil cobbled together a third session of gains and markets wagered U.S. interest rates would not be rising much this year, if at all.

* The U.S. dollar languished at two-week lows in the face of disappointing U.S. economic data. USD/

DATA AHEAD (GMT)

0630 France

Preliminary GDP

Q4

0700 Germany

Retail sales

Dec

1000 Euro zone

Inflation

Jan

1330 U.S.

Advance GDP

Q4

1445 U.S.

Chicago PMI

Jan

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