Gold Ends Under $1,575; Stock Rally Undoes Safe-Haven Bids
Gold traded flat on Tuesday, paring earlier gains as an equities rally and economic optimism reflected by the Dow Jones industrial average's run to its record high sapped demand for safe havens.
Platinum group metals rose sharply as a fresh strike in South African mines stirred supply fears. Bullion was initially supported after China said it planned to increase spending and to set its 2013 growth target at 7.5 percent.
Hopes of a strengthening U.S. economic outlook and the Dow's surge to an all-time high triggered bullion selling. "As long as equities keep hitting new highs, investors are not going to look toward gold.
The focus is on equities right now and it doesn't seem to be toward safe havens," said Howard Wen, metals analyst at HSBC.
ETF Outflow to Bottom Out?
Appetite for gold-backed exchange-traded funds remained soft, with the largest, New York's SPDR Gold Shares, reporting a ninth straight daily outflow of metal on Monday, this time of 0.6 metric tons.
The fund reported its largest ever monthly outflow last in February and has seen holdings fall by 97.5 tonnes since the start of the year, compared to a 39-tonne rise in the same period of 2012.
"The rate of decline is starting to slow after February's huge drop. Once that bottoms out, prices should stabilize," said HSBC's Wen.
Among other precious metals, silver was up 0.70 percent at $29 an ounce. Spot platinum was up more than one percent at $1,583 an ounce, while spot palladium was up more than two percent at $734 an ounce.