*
First Republic shares plunge amid scepticism over rescue
plan
*
U.S. PCE price index data due this week
*
Swiss gold exports to China rose in March
(Recasts, updates prices, adds comments)
By Deep Kaushik Vakil
April 26 (Reuters) - Gold eased back on Wednesday as
yields recovered with the focus returning to upcoming economic
data, after briefly breaking above $2,000 spurred by fresh
worries surrounding the U.S. banking turmoil.
Spot gold fell 0.6% to $1,985.80 per ounce by 12:25 p.m. EDT (16:25 GMT) after jumping as high as $2,009.32 earlier. U.S. gold futures slipped 0.4% to $1,996.20. First Republic Bank's shares hit a record low after a report said the U.S. government was unwilling to intervene in the rescue process for the troubled lender.
"That was the catalyst for gold prices to revisit slightly
higher levels," said Daniel Ghali, commodity strategist at TD
Securities.
But overall, trend-following algorithms have effectively
reached their maximum long positions, Ghali added.
Benchmark U.S. Treasury yields recovered from a
near two-week low, raising the opportunity cost of holding
zero-yield bullion. Gold declined despite the dollar shedding 0.4%, while
investors also took stock of upbeat risk sentiment driven by
strong earnings. Traders were now focused on U.S. quarterly GDP data due on
Thursday, followed by the core personal consumption expenditures
index on Friday, the Fed's preferred inflation gauge.
Markets had priced in about a 3-in-4 chance of the U.S.
central bank raising rates by 25 basis points at its May 2-3
meeting. Those odds were lower due to "resurgent fears that there's
always more than one cockroach when it comes to the U.S.
regional banking crisis," Ghalli said.
Safe-haven gold scaled an over one-year peak at $2,048.71
mid-April as the U.S. banking crisis unfolded.
"Retail, discretionary traders and the like remain very
underexposed, a source of dry powder, especially if the market
ramps up rate cut expectations," said Paul Wong, market
strategist at Sprott Asset Management.
Silver was down about 1% to $24.8 an ounce, platinum gained 0.2% to $1,088.50 and palladium rose 1.9%
to $1,511.23.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
xau ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Deep Vakil and Ashitha Shivaprasad in Bengaluru;
editing by Jonathan Oatis)
