* Gold up over 5 pct for Q3 on weak dlr, easing worries
* Gold-to-silver ratio hits 11-month low
* IMF sold 18.5 tonnes gold in Aug. vs 16.9 tonnes in July
* Coming up: U.S. August personal income due Friday
(Recasts, adds comments, updates prices to market close,
changes byline/dateline)
By Frank Tang
NEW YORK, Sept 30 (Reuters) - Gold dipped on profit-taking
on Thursday after rallying to record highs, racking up its
eighth consecutive quarterly gain as the Federal Reserve stood
ready to pump more cash into the U.S. economy to stave off
double-dip recession.
Having hit its 11th record high in 13 trading sessions,
gold posted a 5 percent gain for the month and the likelihood
of more U.S. monetary easing to support the economy lifted
silver as well.
Two measures of U.S. regional business activity beat
expectations and a drop in weekly jobless claims supported the
view that economic activity picked up in the third quarter,
which boosted the dollar and in turn weighed on gold.
However, this was unlikely to change the view that the
world's largest economy is flagging, which bolstered gold's
safe-haven status.
"In the United States, you've got a gradual grind on the
economic side, so low GDP growth, the Fed likely to keep
rolling over its balance sheet for a while and not increasing
interest rates," said Bank of America-Merrill Lynch analyst
Michael Widmer.
"In that environment, you have a lot of uncertainty and
people are looking to increase their gold holdings."
Spot gold <XAU=> scaled a record high of $1,315.80 an ounce
and eased 0.2 percent to $1,306.75 at 2:33 p.m. EDT (1833 GMT).
U.S. gold futures for December delivery <GCZ0> settled 70 cents
lower at $1,309.60.
COMEX gold open interest eased but held near Tuesday's
record at 619,408 lots, and the exchange estimated final gold
volume at almost 150,000 lots, 30 percent higher than its
30-day average, preliminary Reuters data showed.
Bullion investors took profits on the last trading day of
the third quarter, as the dollar index turned higher after
falling to an eight-month low.
A raft of U.S. economic data on Thursday showed claims for
unemployment benefit fell last week, while economic growth was
a touch higher in the second quarter than previously thought.
[]
There is market talk that the Fed, the Bank of England and
the Bank of Japan would limit rises in interest rates, which
would prove a positive for gold, which tends to benefit in an
environment of loose monetary policy.
"With quantitative easing, it is probably no longer a
question of if, but when," said Daniel Briesemann, an analyst
at Commerzbank.
"The other thing in the mind of investors is that there
might be a war (of) currency devaluations in some of the main
world currencies like the dollar, yen, and so on," he said.
"That is supportive for gold as well."
Bearish technical flags also prompted selling, said Rick
Bensignor, chief market strategist at investment banking group
Execution Noble.
A combination of upside exhaustion signal and a 90 percent
bulls in daily sentiment index suggested investors should
lessen positions between $1,306 and $1,322 an ounce, said
Bensignor.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Graphic on gold's performance relative to other commodities
http://r.reuters.com/was95p
Graphic in gold's performance vs other assets:
http://r.reuters.com/cek95p
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
GOLD DRIVEN BY DOLLAR WEAKNESS?
Gold benefited as the dollar was on track for its biggest
quarterly drop since the second quarter of 2002 against a
basket of six other currencies, down more than 8 percent. The
euro was up almost 12 percent, also its best quarterly
performance since 2002. []
In the official sector, the International Monetary Fund
sold 18.5 tonnes of gold in August, up from 16.9 tonnes in July
as part of its open-market bullion sales plan. []
Strength in gold prices also helped lift silver to its
highest level since 1980, palladium to a 2-1/2 year high and
platinum to its strongest since May.
Silver <XAG=> hit a fresh 30-year high at $22.07 an ounce,
and was trading down 0.1 percent at $21.78 an ounce, yet still
on track for its biggest monthly gain since May 2009.
The metal has climbed on the back of rising gold prices,
but continues to outperform its rival. The gold-silver ratio --
how many ounces of silver are needed to buy an ounce of gold --
hit a low at 59.7 on Thursday, its weakest since last October.
Platinum <XPT=> hit a four-month high at $1,664.00 an ounce
and rose 0.5 percent at $1,654, while palladium <XPD=> was also
trading up 0.5 percent at $566.00, having earlier touched its
highest since March 2008 at $581.50 an ounce.
Prices at 2:46 p.m. EDT (1846 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1309.60 -0.70 -0.1% 19.5%
US silver <SIZ0> 21.688 0.233 0.0% 28.8%
US platinum <PLF1> 1658.60 2.00 0.1% 12.8%
US palladium <PAZ0> 560.30 9.60 1.7% 37.0%
Gold <XAU=> 1308.20 -0.60 0.0% 19.3%
Silver <XAG=> 21.80 -0.07 -0.3% 29.5%
Platinum <XPT=> 1653.50 7.75 0.5% 12.8%
Palladium <XPD=> 566.00 2.55 0.5% 39.6%
Gold Fix <XAUFIX=> 1307.00 -4.00 -0.3% 18.4%
Silver Fix <XAGFIX=> 22.07 20.00 0.9% 29.9%
Platinum Fix <XPTFIX=> 1662.00 12.00 0.7% 13.4%
Palladium Fix <XPDFIX=> 573.00 5.00 0.9% 42.5%
(Additional reporting by Amanda Cooper and Jan Harvey in
London; Editing by Marguerita Choy)
