Gold dips

Gold fell early on Thursday, as another sharp pullback in crude oil prices and improving US jobs data decreased bullion's appeal as a hedge, and continued outflows from gold-backed ETFs suggested the precious metal is susceptible to further losses. Weighing heavily on the gold market was a nearly 4 percent drop in oil prices after government data showed US crude stockpiles surged at the delivery point for crude futures.
Oil prices have slumped some 30 percent since Brent hit a June high above $115 on fears of an oil glut. Higher US quits rate and new jobless claims remaining near a 14-year low suggest the US job market is moving toward full health, undermining gold's appeal as a hedge against economic uncertainty.
A sell-off since October 31 has sent gold sliding below the key technical level of $1,180 an ounce to a 4-1/2-year low of $1,131.85, triggering demand for physical metal from price-sensitive buyers. "Physical buyers have responded positively to cheaper prices despite continued liquidations from the gold-exchange traded funds," said James Steel, chief metal analyst at HSBC.
However, sharp outflows in gold exchange-traded funds suggest the metal's price could fall further, Steel said. Spot gold was down 0.1 percent at $1,159.59 by 2:38 pm EST (1938 GMT). US COMEX gold futures for December delivery outperformed spot, settling up $2.40 an ounce at $1,161.50. The dollar was down 0.3 percent against the euro on Thursday. The US unit fell after New York Federal Reserve President William Dudley said any premature tightening in America's monetary policy could hurt the economic recovery.
A run of relatively firm data had raised expectations that US rates will rise sooner rather than later, pressuring non-yielding gold. That has already largely been priced into the metal, analysts said. Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, fell 1.8 tonnes to 722.67 tonnes on Wednesday, the seventh straight day of declines. Some support was offered by buying of physical gold in China overnight, dealers said. However, the World Gold Council reported on Thursday that Chinese demand fell heavily in the third quarter, with jewellery demand down 39 percent and bar and coin buying 30 percent lower. That helped knock global demand 2 percent lower. Silver fell 0.5 percent to $15.55 an ounce. Platinum was down 0.8 percent at $1,187.70 an ounce and palladium dropped 1 percent at $763.98 an ounce.