* Gold sags after U.S. data as equities, commodities rise
* Egypt unrest seen lending support in near term
* Coming up: U.S. construction spending due Tuesday
(Recasts, adds comments, updates prices to market close, new
byline, dateline, previously LONDON)
By Frank Tang
NEW YORK, Jan 31 (Reuters) - Gold fell on Monday, notching
its first monthly decline in six months, as strong U.S. factory
and spending data coupled with fading worries about the euro
zone debt crisis put a damper on the metal's rally.
But the prospect of unrest in Egypt spreading across the
Middle East should fuel safe-haven buying in the near term,
traders said. Mass protests in Cairo powered bullion nearly $40
an ounce higher on Friday to its biggest gain in eight weeks.
Investors fled the gold market on Monday on signs of a
receding euro zone debt crisis and a firmer footing for the
U.S. economy.
"Today's decline (in gold) is just a blip on the radar. The
de-risking trade that we saw on Friday is going to reassert
itself," said James Dailey, portfolio manager of the TEAM Asset
Strategy Fund <TEAMX.O>.
The unfolding events in Egypt are "obviously the storyline
right now", he said.
Gold faced pressure from data showing factory activity in
the U.S. Midwest hit a 22-1/2-year high in January as orders
surged and employment prospects brightened, and as a report
showed consumer spending ended 2010 on a firmer footing.
[]
Spot gold <XAU=> fell 0.6 percent to $1,330.65 an ounce by
3:15 p.m. EST (2015 GMT), having hit a low of $1,322.90.
U.S. gold futures for April delivery <GCJ1> settled down
$7.20 at $1,334.50 an ounce, with total volume sharply lower
than usual at around half of Friday's 300,000 lots.
Gold's decline came as commodities were on course to end
January up 2 percent after London's Brent crude oil surpassed
$100 a barrel for the first time since 2008. []
U.S. crude, the benchmark for world oil prices, raced to
catch up with Brent, jumping 2 percent to above $91 on fears
that unrest in Egypt could spread to Middle East oil-producing
nations and disrupt oil shipments through the Suez Canal.
U.S. stocks rose on strong earnings and signs of a
strengthening economic recovery, denting gold's appeal as an
alternative investment. []
Gold has come under pressure this month from a raft of more
positive U.S. economic data, which has lifted appetite for
assets seen as higher-risk, such as stocks.
The euro headed for its second monthly advance against the
dollar and more gains could be in store after a jump in euro
zone inflation bolstered the view interest rates in that region
could rise more quickly than in the United States. []
The prospect of higher interest rates may hurt gold,
analysts said, as the opportunity cost of holding
non-interest-bearing assets goes up as rates increase.
EGYPT SUPPORTS
Scenes in Egypt, where protesters intensified their
campaign to force President Hosni Mubarak to quit, have
encouraged some safe-haven buying of gold, although some
analysts say this support is unlikely to last long.
"What we've seen is (Egypt) has limited the downside more
than anything," said VTB Capital analyst Andrey Kryuchenkov.
"Technically, it's still weak, also I think the investment
community realizes Egypt is probably a temporary thing."
On the physical market, premiums for gold bars were at
their strongest since at least 2004 on tight supply and
short-covering before the festive season in India and China, as
well as physical buying driven by the deadly protests in Egypt.
[]
But the world's largest gold-backed exchange-traded fund,
SPDR Gold Trust <GLD>, said its holdings slipped to an
eight-month low of 1,224.118 tonnes by Jan. 28, reflecting a
decline in investor desire for bullion. []
Holdings of metal in the trust are set for their
second-largest monthly decline since the fund's inception in
late 2004, while open interest in COMEX gold futures staged its
largest weekly fall since at least 1996, according to last
week's Commitment of Traders data.
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http://graphics.thomsonreuters.com/11/01/CMD_SPDR0111.gif
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Silver <XAG=> rose 0.3 percent to $27.98, having risen
earlier to a one-week high at $28.31. Platinum <XPT=> slipped
0.4 percent to $1,785.34 an ounce, while palladium <XPD=>
dropped 0.4 percent to $810.50.
Prices at 3:30 p.m. EST (2030 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1333.80 -6.90 -0.5% -6.2%
US silver <SIH1> 28.169 0.250 0.0% -8.9%
US platinum <PLJ1> 1800.90 -4.10 -0.2% 1.3%
US palladium <PAH1> 820.10 3.10 0.4% 2.1%
Gold <XAU=> 1329.29 -9.01 -0.7% -6.4%
Silver <XAG=> 27.99 0.08 0.3% -9.3%
Platinum <XPT=> 1785.24 -7.26 -0.4% 1.0%
Palladium <XPD=> 810.47 -3.03 -0.4% 1.4%
Gold Fix <XAUFIX=> 1327.00 -6.50 -0.5% -5.9%
Silver Fix <XAGFIX=> 27.75 107.00 4.0% -9.4%
Platinum Fix <XPTFIX=> 1781.00 8.00 0.4% 2.9%
Palladium Fix <XPDFIX=> 806.00 5.00 0.6% 1.9%
(Additional reporting by Amanda Cooper and Jan Harvey in
London; Editing by Dale Hudson)
