PRECIOUS-Gold falls for 3rd day, Fed disappoints

* Spot gold to fall to $1,580 -technicals
* Coming Up: U.S. jobless claims weekly; 1230 GMT

(Updates prices, adds physical activity in Singapore)
By Lewa Pardomuan
SINGAPORE, June 21 (Reuters) - Gold slipped for a third
straight day on Thursday after the U.S. Federal Reserve stopped
short of launching another round of quantitative easing to
stimulate the economy, a move that would have boosted bullion's
appeal by fuelling inflation prospects.
But lower prices attracted purchases from jewellers in Asia,
while a fragile U.S. economy and the debt crisis in Europe may
eventually prompt the Fed to adopt more aggressive measures to
help the economy.
A Reuters poll showed Wall Street's top bond firms still see
a 50 percent chance of a third bout of quantitative easing or
"QE3", in which the Fed effectively creates money to fund large
asset purchases, to stimulate the economy.
Cash gold fell $4.48 an ounce to $1,600.90 by 0608
GMT. Gold rallied to its 2012 highest level of around $1,790 in
February after the Fed at the time said it would keep interest
rates near zero until the end of 2014 at the earliest.
"The fact is that the Federal Reserve's attitude hasn't
really changed at all," said Yuichi Ikemizu, head of commodity
trading, Japan, at Standard Bank.
"I mean if you read Bernanke's speech, he's still very
worried about unemployment. I am still bullish," said Ikemizu,
who expects gold to hold around $1,580 to $1,590 on the
downside.
Fed Chairman Ben Bernanke, speaking at a news conference
after a two-day policy meeting, said the central bank was
concerned Europe's prolonged debt crisis was dampening U.S.
economic activity and employment.
The Fed expanded its bond-buying scheme dubbed "Operation
Twist" by $267 billion to keep long-term borrowing costs down.
The programme, which was due to expire this month, will now run
through the end of the year.
U.S. gold for August delivery fell more than 1
percent to a low of $1,598.10 an ounce before recovering
slightly to $1,601.80 an ounce, still down $14.00.

ASIA SHARES FALL
Previous rounds of asset purchases by the Fed to drive down
interest rates and stimulate the economy had weakened the U.S.
dollar, boosted global stock markets and prompted investors to
turn to gold.
Shares in Asia fell after the Fed disappointed some
investors with only a limited expansion of monetary stimulus and
a survey showed China's vast factory sector slowed for an eighth
month running. The dollar, however, held above a one-month low
against a basket of major currencies.
The physical market noted buying interest overnight and also
on Thursday, keeping premiums for gold bars steady at $1.20 an
ounce to spot London prices in Hong Kong, and at 80 cents in
Singapore.
"There's some buying on dips from Thailand. But I think
people are watching where the price is heading. It's hanging
around the $1,600-level and it can either dip further or go up,"
said a dealer in Singapore.
"If it goes up, then they will decide whether to sell or
buy."
Other dealers said the price correction could prompt more
central bank buying after Kazakhstan's central bank said it
planned to boost the share of gold in its gold and foreign
currency reserves to 20 percent from 14 to 15 percent.

"We may see a bit of bargain hunting from jewellers later.
People are waiting for the downside. Premiums haven't changed
yet, but let's see what happens in the next few days," said a
dealer in Hong Kong. "It seems that central banks are on the
buying side nowadays."

Precious metals prices 0608 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1600.90 -4.48 -0.28 2.37
Spot Silver 27.90 -0.20 -0.71 0.76
Spot Platinum 1454.75 4.35 +0.30 4.43
Spot Palladium 614.75 0.00 +0.00 -5.79
COMEX GOLD AUG2 1601.80 -14.00 -0.87 2.23 11126
COMEX SILVER JUL2 27.87 -0.52 -1.83 -0.16 8057
Euro/Dollar 1.2677
Dollar/Yen 79.63

COMEX gold and silver contracts show the most active months