Gold lower as economy improves

New York, Reuters (5/2) - Gold fell on Tuesday, retreating from an initial rally, as solid gains in U.S. equities and an improving economic outlook weighed on the metal's safe-haven appeal.

Bullion rose earlier in the session after data showed Hong Kong's net gold flow to mainland China jumped 47 percent in 2012 to a record high.


The report was consistent with latest official-sector data showing renewed gold interest among central banks such as Russia, South Korea and other emerging economies.

Spot gold was down 0.1 percent to $1,671.80 an ounce by 2:42 p.m. EST (1942 GMT), retreating from a high of nearly $1,685 earlier in the session.

U.S. gold futures for April delivery settled down $2.90 at $1,673.50, with trading volume about 10 percent below its 30-day average, preliminary Reuters data showed.

Signs that the euro zone economy is stabilizing also pressured gold. The Markit's Eurozone Composite PMI data showed a rise to a 10-month high in January, and the encouraging U.S. service-sector data also drove investors to the equity markets and out of gold, analysts said.

Gold investors are now digesting a report that the fiscal 2013 U.S. budget deficit will dip to $845 billion after four straight years of $1 trillion-plus deficits, data from the Congressional Budget Office showed.

http://www.reuters.com/article/2013/02/05/markets-precious-idUSL5N0B56DS20130205