By Francesca Freeman
Spot gold is little changed in Europe Wednesday, continuing the
rangebound trade of recent sessions as investors avoid any bold
moves ahead of key U.S. data later in the week.
At 0817 GMT, spot gold was up just 0.2% at $1,776.6 a troy
ounce. Silver traded at $34.705/oz, up 0.3%.
The combination of a week-long holiday in China and caution
ahead of the monthly U.S. nonfarm payroll report Friday is keeping
gold trade relatively thin this week.
The U.S. payroll reading, which is widely viewed as a measuring
stick for the health of the world's largest economy, is likely to
be eyed for clues as to how long the Federal Reserve's largest
round of quantitative easing will continue. Since the Fed offered
no strict deadline for the program's completion, a weak reading
could be taken as a signal that easing--which tends to boost gold's
appeal as a hedge against currency debasement and inflation--could
be prolonged.
"We expect the markets to remain rather listless until later in
the week when more U.S. macro numbers hit the wires," said INTL
FCStone analyst Edward Meir.
The platinum group metals are similarly subdued Wednesday,
despite ongoing labor tensions at South Africa's platinum mines. At
0817 GMT, spot platinum was up 0.1% at $1,670.75/oz and spot
palladium was 0.2% lower at $648.70/oz.
Unrest at Anglo American Platinum Ltd.'s (AMS.JO) South African
mines spread Tuesday as more workers refused to work and demanded
higher wages. The walk-out follows a six-week long strike in August
at Lonmin PLC (LMI.LN) that left 46 people dead.
Other sectors are also being affected, with miners at AngloGold
Ashanti Ltd (ANG.JO) Gold Fields Ltd. (GFI), Samacor Chrome and
Petra Diamonds Ltd. (PDL.LN) also on strike.
While platinum prices continue to be underpinned by concern over
supply of the metal from South Africa, weak demand from the
autocatalyst sector--which accounts for around 60% of platinum
usage--is likely to hinder sustained gains, said analysts.
"The overriding trend in the platinum market has been the
unprecedented level of supply disruptions through a combination of
illegal strike action, weak pricing leading to closures and section
54 safety stoppages at the beginning of the year," said Deutsche
Bank. "However, weak demand and a well-stocked auto sector mean
that these supply disruptions have simply prevented a significant
inventory build-up over the course of 2012."
Deutsche Bank now forecasts a 75,000-ounce platinum market
surplus this year, compared with earlier forecasts of a
300,000-ounce surplus.
Devon Maylie contributed to this report.
Write to Francesca Freeman at francesca.freeman@dowjones.com