PRECIOUS-Gold heads for 2nd monthly rise; but Syria, stimulus concerns linger

                            Gold held steady on Friday as the probability of an immediate U.S. strike on Syria faded, and strong U.S. data rekindled fears of an imminent scale-back of the Federal Reserve's stimulus measures. The metal is headed for its second straight monthly gain, helped largely by short-covering and technical buying that pushed it above the key $1,400 level this week. At its 3-1/2 month high of $1,433.31 hit on Wednesday, gold had gained 21 percent from the three-year low of $1,180.71 marked on June 28, but it is now struggling to hold at those levels amid a slowdown in physical demand and strong economic data. "Looks like the market is running out of steam at these levels," said one Singapore-based gold trader. "If it cannot hold above $1,400 today, it will surely see a sharp drop." "We have seen quite a sharp slowdown in physical buying." Spot gold had risen 0.1 percent to $1,409.66 an ounce U.S. gross domestic product grew at a 2.5 percent annual rate in the April-June period, more than double the pace clocked in the prior three months. The number of Americans filing new claims for jobless benefits fell last week, a potential sign of faster hiring in August. Strong U.S. data bolsters the case for the tapering of the Fed's massive stimulus that pushed gold to above $1,900 an ounce in 2011. U.S. officials conceded on Thursday they lacked conclusive evidence that Syrian President Bashar al-Assad personally ordered last week's poison gas attack, and some allies have warned that military action without U.N. Security Council authorization risks making the situation worse. As geopolitical tensions in Syria mounted, gold's safehaven appeal had increased.

PHYSICAL SLOWDOWN Gold prices above $1,400 for the first time in more than two months have deterred buyers who had splurged on jewellery, bars and coins earlier this year. In Hong Kong - the key gold supplier to China - gold kilo bar premiums declined to $2.50 an ounce from $5 two weeks ago. Tokyo premiums fell to 50 cents from $1.50, while those in Singapore dropped to $1.50. Dealers said there has been a lot of selling in the physical markets in Asia as consumers look to profit from the higher prices.

Precious metals prices 0407 GMT

Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1409.66 2.02 +0.14 -15.82 Spot Silver 23.90 0.07 +0.29 -21.07 Spot Platinum 1514.74 1.04 +0.07 -1.32 Spot Palladium 735.50 1.52 +0.21 6.29 COMEX GOLD DEC3 1409.90 -3.00 -0.21 -15.87 11665 COMEX SILVER SEP3 23.92 -0.17 -0.71 -21.07 159 Euro/Dollar 1.3240 Dollar/Yen 98.18

COMEX gold and silver contracts show the most active months

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Natural gas prices drop on bearish U.S. inventory figures

                   Natural gas prices dropped on Thursday after official U.S. data revealed that the country's stockpiles rose more than expected last week.

On the New York Mercantile Exchange, natural gas futures for delivery in October traded at USD3.515 per million British thermal units during U.S. trading, down 1.87%. The October contract settled up 0.25% at USD3.582 per million British thermal units on Wednesday.

The commodity hit a session low of USD3.511 and a high of USD3.648.

The U.S. Energy Information Administration said in its weekly report that natural gas storage in the U.S. in the week ending Aug. 23 rose by 67 billion cubic feet, above market expectations for an increase of 63 billion cubic feet.

Inventories increased by 64 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a build of 66 billion cubic feet.

Total U.S. natural gas storage stood at 3.130 trillion cubic feet as of last week. Stocks were 235 billion cubic feet less than last year at this time and 45 billion cubic feet above the five-year average of 3.085 trillion cubic feet for this time of year.

The report showed that in the East Region, stocks were 107 billion cubic feet below the five-year average, following net injections of 49 billion cubic feet. 

Stocks in the Producing Region were 95 billion cubic feet above the five-year average of 978 billion cubic feet after a net injection of 16 billion cubic feet.

Also pressuring prices lower were updated weather forecasts calling for below-normal temperatures in parts of the heavily populated northeastern U.S.

Demand for natural gas tends to wane at the country's thermal power plants as temperatures fall, as homes and businesses throttle back on their air conditioners.

Elsewhere on the NYMEX, light sweet crude oil futures for delivery in October were down 0.88% and trading at USD109.13 a barrel, while heating oil for October delivery were down 0.38% and trading at USD3.1993 per gallon.

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Gold prices decline on strong data points

                   

                   Gold prices traded lower in the early part of Friday’s Asian session amid a raft of encouraging U.S. and Asian economic data points. 

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery fell 0.62% to USD1,403.80 per troy ounce in Asian trading Friday. The October contract settled down 0.42% at USD1,412.60 per ounce on Thursday. 

Gold futures were likely to find support at USD1,389.50 a troy ounce, Monday's low, and resistance at USD1,433.50, Wednesday's high. 

In U.S. economic news out Thursday, the U.S. Commerce Department said U.S. GDP grew 2.5% in the second quarter, well above the initial reading that showed growth of 1.7%. Economists expected the revision to show growth of 2.2%. Consumer spending grew 1.8% after rising 2.3% in the first quarter. 

The Labor Department said initial claims for jobless benefits fell by 6,000 to 331,000 last week. Economists expected first-time claims to come in at 332,000.The less volatile four-week moving average rose by 750 to 331,250. 

Strong data points from the world’s largest economy reinvigorated speculation the Federal Reserve will move to begin tapering its quantitative easing program, perhaps as soon as September. 

Gold was also pressured as investors continued to flee to the U.S. dollar as a safe-haven play amid the possibility of a U.S.-led military strike against Syria’s government following its alleged use of chemical weapons, although an attack seemed less imminent on Thursday due to complaints from U.S. lawmakers that they have not been properly consulted. 

Elsewhere, silver for December delivery slipped 1.55% to USD23.767 per ounce while copper for December delivery rose 0.25% to USD3.262 per ounce. - investing.com

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Oil slides on waning fears of Syria attack

                        Crude Oil futures slid in the early part of Friday’s Asian session after the U.K. parliament voted against military action aimed at Syria. 

On the New York Mercantile Exchange, light, sweet crude futures for October delivery plunged 1.42% to USD107.26 per barrel in Asian trading Friday. The October contract settled down 1.18% at USD108.80 per barrel on Thursday. 

While the U.S. and the U.K. have been preparing to attack Syria via missile and air strikes for its alleged use of chemical weapons in its civil war, delays now seem likely due to complaints from U.S. lawmakers that they have not been properly consulted.

Speculation that a U.S. military attack in Syria may engulf the oil-rich Middle East and threaten global supply sent prices gaining on Wednesday, with news reports saying military action was days away. 

After the close of U.S. markets Thursday, the U.K. voted to not proceed with military action against Syria. It is widely expected that France will do the same. However, that does not mean the U.S. will not act alone in its retaliation against, which used chemical weapons against its own citizens. 

Syria headlines overshadowed some strong U.S. economic data. In U.S. economic news out Thursday, the U.S. Commerce Department said U.S. GDP grew 2.5% in the second quarter, well above the initial reading that showed growth of 1.7%. Economists expected the revision to show growth of 2.2%. Consumer spending grew 1.8% after rising 2.3% in the first quarter. 

The Labor Department said initial claims for jobless benefits fell by 6,000 to 331,000 last week. Economists expected first-time claims to come in at 332,000.The less volatile four-week moving average rose by 750 to 331,250. 

Strong data points from the world’s largest economy reinvigorated speculation the Federal Reserve will move to begin tapering its quantitative easing program, perhaps as soon as September. That capped gains for U.S. equities. 

Elsewhere, Brent crude for October delivery fell 0.56% to USD113.82 per barrel on the ICE Futures Exchange. - Investing.com

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