PRECIOUS-Gold inches up as sluggish data supports Fed’s stimulus

PRECIOUS-Gold inches up as sluggish data supports Fed’s stimulus

SINGAPORE, Feb 22 (Reuters) – Gold inched up on Friday, extending gains from the previous session as lacklustre U.S. data bolstered expectations that the Federal Reserve‘s monetary stimulus would stay in place.

FUNDAMENTALS
* Spot gold inched up 0.1 percent to $1,577.44 an ounce by 0037 GMT, on course for a nearly 2 percent weekly decline, its second week in the red.

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* U.S. gold was little changed at $1,577.50.

* A raft of U.S. economic data on Thursday, from claims for jobless aid to factory activity and consumer prices, pointed to a still tepid recovery and supported the argument for the Federal Reserve to maintain its monetary stimulus.

* Two top Federal Reserve officials on Thursday signalled support for scaling back the U.S. central bank’s aggressive bond-buying program, adding fuel to a contentious debate over how long the Fed should continue its extraordinary measures to support the economy.

* Thursday’s Flash Eurozone Services PMI (purchasing managers index) fell below expectations, suggesting the downturn in the region’s businesses worsened and dashinghopes that the region’s economy might soon emerge from recession.

* Switzerland remained a net exporter of platinum and palladium in January, continuing December’s trend, data from the Swiss customs bureau showed on Thursday.

* Holdings of SPDR Gold Trust, the world’s biggest gold-backed exchange-traded fund, dropped 8.89 tonnes to 1,290.306 tonnes on Feb. 21, the lowest in more than five months. The holdings have fallen more than 32 tonnes, or 2 percent, so far this week.

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MARKET NEWS
* U.S. stocks fell for a second straight day on Thursday and the S&P 500 posted its worst two-day loss since November after reports cast doubt over the health of the U.S. and euro-zone economies.

* The dollar inched lower on Friday against a basket of currencies, but remained near a 5-1/2-month top hit in the previous session.

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