Precious metals end moderately lower

Prices slip as traders await crucial economic data

Bullion prices ended lower on Tuesday, 03 December 2013. Gold futures settled with a minor loss on Tuesday, holding their ground at their lowest level in about five months as traders await economic data this week, including the monthly U.S. jobs report, for clues on the Federal Reserve's plan for its stimulus program.

Gold for February delivery fell $1.10, or 0.1%, to settle at $1,220.80 an ounce on the Comex division of the New York Mercantile Exchange.

March silver fell 22 cents, or 1.2%, to $19.065 an ounce at Comex on Tuesday.

Meanwhile, analysts at UBS slashed their 2014 price forecasts for both gold and silver, citing few positive catalysts in the medium term and given that tapering of the Fed's quantitative-easing program may potentially start in January. UBS also cut its silver forecast to $20.50 an ounce from $25 for 2014. For 2014, UBS cut its forecast on gold to $1,200 an ounce from $1,325.

This is a big week for economic data, highlighted by the European Central Bank's monthly monetary policy meeting on Thursday and the U.S. jobs report on Friday. However, there are other key reports out this week, including Wednesday's U.S. Federal Reserve's beige book and Thursday's U.S. GDP report.

Monday's batch of generally upbeat U.S. data fell into the camp that reckons the Fed will act to taper sooner rather than later. This week's data will provide at least some new insight on the timing of the Fed's next move. Meantime, the ECB recently eased its monetary policy and the market place is wondering what central bank's next move will be.

In overnight news, the OECD reported inflation in its 34 member economies fell for a third straight month in Octoberto 1.3% from 1.5% in September, on an annualized basis. The EU statistics agency said Tuesday the EU's producer prices fell at the fastest rate in four years in October, at down 0.5% from September and down 1.4% from the previous year. This news is likely to keep the ECB in a very easy money policy mode, as the central bank does not want deflation to set in.

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