* Gold pressured as dollar reverses early decline vs euro
* Investors cautious ahead of Friday's payrolls report
* US Mint to resume American Eagle silver coins sale
* Coming up: ISM Non-manufacturing index due Tuesday
(Recasts, updates prices to market close, deletes second
byline/dateline)
By Frank Tang
NEW YORK, Oct 4 (Reuters) - Gold dropped on Monday as it
record rally paused thanks to a stronger dollar and promising
U.S. housing data, but renewed financial worries in some euro
zone countries provided underlying support.
Bullion broke a six-session string setting all-time highs,
as the euro pulled back against the dollar on renewed concerns
about the financial viability of euro zone banks. Wall Street
stock indexes also fell more than 1 percent.
Michael Daly, gold specialist at Chicago-based futures
broker PFGBest, said gold's weakness stemmed from anxiety
related to a key non-farm payroll report due Friday.
"There are a lot of apprehensions in the uncharted
territory. Bullion investors may opt to take profit and reenter
the market after a brief pullback," Daly said.
Spot gold <XAU=> eased 0.1 percent at $1,314.70 an ounce at
4:02 p.m. EDT (2002 GMT). It hit a record at $1,320.80 an ounce
on Friday. U.S. gold futures for December delivery <GCZ0>
settled down $1 at $1,316.80.
A report showing pending sales of previously owned U.S.
homes rose to a four-month high in August helped boost the
dollar and took some steam out of bullion. []
Gold's advance to consecutive highs last week after a
string of unimpressive U.S. data reports and comments from
Federal Reserve officials reinforced expectations of further
monetary easing.
Renewed concerns about the stability of the euro zone also
increasing gold's appeal as a safe haven and contributed to the
bullish scenario that has lured investors of all types into
gold.
The U.S. Mint said on Monday it will resume offering the
popular one-ounce American Eagle silver proof coins,
highlighting strong investment demand for the white metal.
[]
But a reversal of the dollar on Monday, as bad news from
Ireland, Portugal and Greece overshadowed concerns the Federal
Reserve may further ease U.S. monetary policy, undermined a
negative for the U.S. currency and a support for gold. []
The Irish central bank said on Monday that Ireland's
economy will crawl to a virtual halt this year, defying
government hopes of modest growth, underlining the challenge
the country's leaders face to revive its fortunes.
[].
The usual inverse relationship between gold and dollar has
showed signs of strengthening of late. The 25-day correlation
between the metal and the the U.S. currency has increased to a
negative 0.4, the strongest inverse link since May. (Graphic:
http://link.reuters.com/pup76p)
However, fading upward momentum in an overly bullish market
could trigger pullbacks, one technical analyst said.
Gold could head for a $50-75 short-term pullback based on
bearish signals, said Rick Bensignor, chief market strategist
at investment banking group Execution Noble, citing a study
called the DeMark Sequential model and a 91 percent daily
bullish sentiment index.
Analysts are now eyeing key U.S. non-farm payrolls data due
on Friday for clues as to the next direction of the dollar.
Silver <XAG=> was trading unchanged at $21.97 an ounce.
Silver has outpaced the rise in gold prices so far this
year, with the gold-silver ratio - the number of silver ounces
needed to buy an ounce of gold - dipping below 60 for the first
time in nearly a year last week. (Graphic:
http://link.reuters.com/wuk76p)
Platinum <XPT=> slipped 0.7 percent to $1,675.15 an ounce,
and palladium <XPD=> was trading down 1.8 percent at $559.50.
Prices at 4:15 p.m. EDT (2015 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1316.80 -1.00 -0.1% 20.1%
US silver <SIZ0> 22.036 -0.024 0.0% 30.8%
US platinum <PLV0> 1667.70 -8.20 -0.5% 13.4%
US palladium <PAZ0> 561.30 -13.60 -2.4% 37.3%
Gold <XAU=> 1314.50 -1.00 -0.1% 19.9%
Silver <XAG=> 21.98 0.01 0.0% 30.5%
Platinum <XPT=> 1667.50 -7.65 -0.5% 13.8%
Palladium <XPD=> 559.50 -10.00 -1.8% 38.0%
Gold Fix <XAUFIX=> 1313.50 -2.50 -0.2% 19.0%
Silver Fix <XAGFIX=> 22.03 8.00 0.4% 29.7%
Platinum Fix <XPTFIX=> 1667.00 1.00 0.1% 13.7%
Palladium Fix <XPDFIX=> 565.00 1.00 0.2% 40.5%
(Additional reporting by Jan Harvey in London; Editing by
Alden Bentley)
