US MIDDAY: gold rises

Gold prices rose on Monday, firming on technical buying and then seesawing around $1,680 an ounce, buoyed by technical factors and gains in oil and equity markets. Gold also drew support as the euro retraced early losses after falling to one-month lows against the dollar on weak European manufacturing data.
Spot gold was up 0.7 percent at $1,679.09 an ounce at 1:18 EDT (1718 GMT), while US gold futures for April delivery were up $9.20 an ounce at $1,681.10. The precious metal posted a 6.6 percent rise in the first quarter after Federal Reserve comments reassured investors that US interest rates would remain low for an extended period, keeping the opportunity cost of holding gold low.
Signs of improvement in the US economy have clouded the picture for gold, as a healthier recovery could make it less likely that the Federal Reserve will try to juice the economy with another round of government bond buying, or quantitative easing. "The wider macro environment is generally improving ... so I think that's creating some headwinds, and also the European banking crisis settled down, so there's less need for safe haven of gold at this point," Standard Chartered analyst Daniel Smith said.Data released on Monday showed the pace of growth in the US manufacturing sector picked up a tad in March, although US construction spending in February recorded its largest drop in seven months.
US Commodity Futures Trading Commission figures showed on Friday that money managers, including hedge funds and other large speculators, raised their bullish bets in gold for the first time in four weeks last week.
Speculators in silver also cut bullish exposure, reducing net length by 3,284 lots to 17,031 contracts - the lowest level since the week of January 29, when they were long on 16,034 lots. Jewellers in major gold consumer India remained on strike on Monday for a 17th day after the finance minister proposed to double the import duty on gold, an excise duty on unbranded jewellery and a tax on transactions worth more than 200,000 rupees.
"A recent pull-back in Indian gold demand has forced prices lower over recent weeks, following the Indian government's decision to double the duty payable on gold imports to 4 per cent and to impose an additional 0.3 per cent tax on most gold jewellery," National Australia Bank said in a note.
Spot silver was up 2.8 percent at $33.12 an ounce. The grey metal broke a three-quarter losing streak in the first three months of 2012, rising 16 percent on gold's coat-tails. Spot platinum was up 0.3 percent at $1,649.24 an ounce, while spot palladium was up 1.7 percent at $658.97 an ounce. US auto sales are expected to continue at a strong pace in March, capping the best quarter in four years.