* Gold headed for the 4th consecutive week of loss
* Gold to fall to $1,290-technicals
* Coming up: U.S. Q4 GDP; 1330 GMT
(Adds details, comments; updates prices)
By Rujun Shen
SINGAPORE, Jan 28 (Reuters) - Spot gold fell to a four-month
low on Friday, as an improved economic outlook in the U.S. and
Europe continued to depress safe-haven demand, but physical
buying is expected to lend some support.
U.S. housing and factory data on Thursday showed the economy
still gaining strength in December but at a pace unlikely to
cause the Federal Reserve to rethink its stimulus program.
The gross domestic product data due later today is expected
to show the world's biggest economy picking up speed but short
of the pace needed to bring down unemployment.
Spot gold fell to a low of $1,308 an ounce, and was
trading at $1,312.16 at 0350 GMT.
Gold is on course for a fourth straight week of declines,
its longest losing streak in a year. It was headed for a 7.4
percent monthly fall, it biggest since October 2008.
U.S. gold fell about half a percent to $1,311.9.
"It does seem sentiment has been shaken and technical charts
aren't looking fantastic," said Yingxi Yu, an analyst at
Barclays Capital.
"We remain optimistic on gold prospects for the next few
months, but the near-term correction could continue for quite
some time. We've seen some speculative positions in gold being
liquidated in the past few days, as well as some outflow from
the ETF."
Holdings in the SPDR Gold Trust , the world's largest
gold-backed exchange-traded fund, fell to an eight-month low of
1,226.546 tonnes by Jan. 27, after a record daily outflow of
31.262 tonnes on Jan. 25.
Spot gold is expected to fall more to $1,290 per
ounce, as a downtrend is intact and bearish momentum strong,
said Reuters market analyst Wang Tao.
For a 24-hour gold technical outlook:
http://graphics.thomsonreuters.com/WT/20112801083803.jpg
The Relatively Strength Indicator on spot gold hovered
around 30, a threshold below which is seen as oversold
territory. The RSI on gold had been above 30 since September
2008.
A buying spree in China and Hong Kong before the Lunar New
Year has slowed down as the holiday looms next week, but some
buyers were still buying betting on future price gains.
"There's a lot of physical buying from Thailand, Indonesia,
China and Hong Kong, for delivery after the Lunar New Year,"
said a Singapore-based dealer.
"Gold should be able to hold the $1,300 level for now.
Physical demand is still there. People are bullish for the long
term, and they will take the opportunity to enter the market."
Inflation pressure has been rising in emerging economies,
and now is spreading to developed countries. South Korea's
government said the inflation situation is continuing to
deteriorate due to rising farm products prices and other
factors.
After India raised interest rates earlier this week, for the
seventh time since March, market players are also eyeing further
possible tightening from Beijing.
Spot silver fell to a 2-1/2 month low of $26.38 an
ounce before regaining some ground to $26.58. Silver was on
course for a fourth successive week of losses, its longest
losing run since July 2009.
Spot platinum fell to a 2-1/2 week low of $1,762, and
was last quoted at $1,771.99.
Precious metals prices 0350 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1312.16 -0.08 -0.01 -7.56
Spot Silver 26.58 -0.30 -1.12 -13.87
Spot Platinum 1771.99 -9.01 -0.51 0.25
Spot Palladium 799.50 -2.72 -0.34 0.00
TOCOM Gold 3504.00 -58.00 -1.63 -6.03 65326
TOCOM Platinum 4768.00 -58.00 -1.20 1.53 9857
TOCOM Silver 70.70 -2.30 -3.15 -12.72 1305
TOCOM Palladium 2130.00 -19.00 -0.88 1.57 404
COMEX GOLD FEB1 1311.90 -6.50 -0.49 -7.70 5143
COMEX SILVER MAR1 26.59 -0.44 -1.63 -14.06 4110
Euro/Dollar 1.3695
Dollar/Yen 82.70
TOCOM prices in yen per gram. Spot prices in $ per ounce.
COMEX gold and silver contracts show the most active months
(Editing by Michael Urquhart)
Reuters
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