PRECIOUS-Gold tips off 3-month high

[verotik66]

* Q4 GDP data shows U.S. economy shrank less than expected

* Indian gold, euro-priced gold hit records

* Silver hits highest level since Oct 1

(Releads, updates prices, adds comment)

By Jan Harvey

LONDON, Jan 30 (Reuters) - Gold slipped from a three-month high on Friday after data showed the U.S. economy had contracted by less than expected in the fourth quarter, taking some of the heat out of safe-haven buying.

Spot gold <XAU=> climbed 2 percent to $926.90 an ounce, its highest since Oct 10. It was quoted at $918.90/920.90 an ounce at 1406 GMT, up from $906.75 in New York late on Thursday. In the immediate wake of the data it slipped to $916.60.

Gold priced in euros <XAUEUR=R> hit a record high of 720.53 euros.

"On first glance the (GDP) figures are generally good, so they should be negative for gold," Calyon analyst Robin Bhar said. "Growth is better than expected, but deflation is also stronger, so it is a bit of a double whammy for gold."

The U.S. Commerce Department said fourth-quarter gross domestic product fell at a 3.8 percent annual rate, the lowest pace since the first quarter of 1982. [ID:nN29308953]

Analysts had forecast GDP contracting 5.4 percent in the fourth quarter.

Gold is still being supported, however, by interest in the precious metal as a haven from risk.

U.S. gold futures for February delivery GCG9 on the COMEX division of the New York Mercantile Exchange were up $15.80 at $920.80 an ounce.


Market talk of China taking an interest in gold as an alternative to U.S. Treasuries, and of a European fund buying bullion, also helped support prices.

[verotik66]

hey slow what do you think happens if china switches to gold? i wonder if you will be able to trade a roll of greenbacks for a roll of TP

[Slow]

hey slow what do you think happens if china switches to gold? i wonder if you will be able to trade a roll of greenbacks for a roll of TP

If not toilet paper, our next best option would be Canadian money.


China will never let go of the dollar, it makes no sense. They would be cutting off their nose to spite their face.

Why would you devalue the currency you hold so much debt for? Why would you devalue the currency that buys a vast majority of your exports?

[Hans]

Because once it's turned into a currency with no value you don't have to bother paying it back?

[Slow]

Because once it's turned into a currency with no value you don't have to bother paying it back?

Thus my point, Hans.