Gold steadies after best month in a year

By: | Published: February 1, 2016 8:37 AM

Gold steadied at the start of the month on Monday, supported by slower U.S. fourth-quarter economic growth, after ending January with its biggest monthly gain in a year.

Spot gold was little changed at ,117.31 an ounce by 0043 GMT. Bullion ended last month with a gain of 5.4 percent, its largest gain since January 2015. (AP)Spot gold was little changed at ,117.31 an ounce by 0043 GMT. Bullion ended last month with a gain of 5.4 percent, its largest gain since January 2015. (AP)

Gold steadied at the start of the month on Monday, supported by slower U.S. fourth-quarter economic growth, after ending January with its biggest monthly gain in a year.

FUNDAMENTALS

* Spot gold was little changed at $1,117.31 an ounce by 0043 GMT. Bullion ended last month with a gain of 5.4 percent, its largest gain since January 2015.
* U.S. gold for April delivery was up 0.1 percent at $1,117.80 an ounce.
* U.S. economic growth braked sharply in the last quarter of 2015, expanding at an annual 0.7 percent rate, as businesses stepped up efforts to reduce an inventory glut and a strong dollar and tepid global demand weighed on exports.
* The data underpinned hopes that the Federal Reserve will slow the pace of future U.S. rate increases, aiding gold.
* Gold touched a 12-week high of $1,127.80 on Wednesday, after the Fed said it was closely watching the global economy and financial markets and their impact on the U.S. economy.
* Fresh data out of China on Monday should provide more clues on the state of the world’s No. 2 economy, with the government releasing both manufacturing and non-manufacturing data.
* Dallas Fed President Robert Kaplan said it was “significant” that the Fed decided to no longer describe the risks to the U.S. economy as being “balanced,” a term that meant officials were comfortable with their view of the outlook.
* Hedge funds and money managers boosted their bullish bet in COMEX gold to a 12-week high in the week to Jan. 26, as they also hiked a silver net long stance, U.S. Commodity Futures Trading Commission data showed on Friday.
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MARKET NEWS
*  Asian shares started a new month on somewhat firmer footing, helped by accommodative monetary policies in Japan and Europe, but traders were cautious ahead of China factory and service sector activity surveys.
* The yen nursed broad losses while the euro was also on the defensive after a surprise cut in Japanese interest rates sent bond yields sliding across the globe and particularly in Europe.

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