Gold headed for 4th day of fall as upbeat US data dents appeal

Gold headed for 4th day of fall as upbeat US data dents appeal - Gold inched lower on Wednesday in its fourth day in the red, as promising U.S. data curbed safe-haven demand, while worries about the euro zone's fiscal health after Cyprus' unprecedented rescue deal continued to support the precious metal.

Orders for long-lasting U.S.-made goods surged last month and home prices posted their biggest year-on-year gain in six-and-a-half years in January, the latest signs the U.S. economy regained momentum early in the first quarter.

Reuters/Reuters - Gold bars are displayed at South Africa's Rand Refinery in a file photo. REUTERS/Siphiwe Sibeko

Upbeat U.S. data in recent months has boosted confidence in the recovery of the world's top economy, driving investors to high-yielding assets such as equities, while little inflationary pressure has kept gold's appeal as a hedge against rising prices muted.

"It's tough to keep investors in gold, and even tougher to motivate them to buy gold," said Dominic Schnider, analyst at UBS Wealth Management in Singapore.

Gold is likely to remain in consolidation in the next few months, but an improving economic growth could fuel inflation later in the year, which would help lift gold, he said.

"When we get into the second half of the year, there will be growth and there will also be price pressure, which should give gold stimulus towards $1,800 an ounce," said Schnider.

Spot gold fell 0.4 percent to $1,592.46 an ounce by 0706 GMT, on course for a fourth session of straight losses, matching a similar run in late February and early March.

U.S. gold dropped 0.3 percent to $1,591.60.

The popular Shanghai silver forward lost nearly 2 percent to a three-month low of 5,860 yuan a tonne, and spot silver dropped to a more than three-week trough of $28.22.

Traders attributed the sharp fall to technical selling after a break below recent support levels.

"Silver had been in a range between $28.50 and $29.50 for a while, so some stops may have been triggered," said a Tokyo-based trader.

For the short term, worries about the financial stability of the euro zone after Cyprus clinched a rescue deal that forces losses on depositors and bank bond holders will keep a floor under bullion.

Reflecting the stalled momentum in gold, holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 1,221.260 tonnes for the third session on March 26.

Activities in Asia's physical gold market slowed to a trickle as prices bounced in a small range, dealers said.

"Prices are not going anywhere and there is no buying interest," said a Singapore-based dealer.

In Thailand, retail jewellery business was bustling thanks to a strong baht, which traded near a 16-year high hit last week, though investment demand was sluggish, she added.

Platinum and palladium also faltered. Spot platinum lost 0.4 percent to $1,568.25, retreating from a two-week high of $1,601 hit earlier in the day. Spot palladium inched down 0.2 percent to $758.68. ( Reuters )