PRECIOUS-Gold down on EU data, better economic outlook

Wed Jan 23, 2013 2:52pm EST

* Strong euro zone consumer morale data weighs on gold
    * Gold fails to break technical resistance at 50-day MA
    * Silver hits 5-week high, ends up despite weak precious
    * Coming up: US Markit manufacturing data, jobless claims
Thurs

 (Adds market details, updates prices)
    By Frank Tang
    NEW YORK, Jan 23 (Reuters) - Gold dropped on Wednesday,
retreating from the previous session's one-month high, as signs
of an improving global economy capped investor interest in
safe-haven investments.
    The metal fell for the first time in the last three
sessions, after the European Commission said consumer morale in
the euro zone improved sharply in January. Reuters polls also
showed that the world economy should perform slightly better
this year on recovering Asian growth. 
 
    "I don't think there is any reason for investors to own gold
any more as the economy is turning around," said COMEX gold
options floor trader Jonathan Jossen.
    Jossen, however, said strong buying interest and dip-buying
has definitely underpinned the price of gold, and that kept gold
from dropping further. 
    Despite Wednesday's pullback, gold is on track for a fourth
consecutive weekly gain, its longest weekly winning streak since
September.  
    Spot gold fell 0.4 percent to $1,684.96 an ounce by
2:28 p.m. EST (1928 GMT). It hit a one-month high of $1,695.76
in the previous session but failed to retain upward momentum on
lower investment demand and technical resistance.
    U.S. COMEX gold futures for February delivery settled
down $6.50 at $1,686.70 an ounce. Trading volume was on track to
finish in line with its 250-day average, preliminary Reuters
data showed, partially boosted by February-April contract
rollover.
    "We can see rather lacklustre interest for gold right now,
with investors withdrawing some money from the gold market," as
the global economy shows signs of improvement, said Tobias
Merath, global head of commodity research at Credit Suisse.
    Bullion holdings at the SPDR Gold Trust, the world's
largest gold-backed exchange-traded fund, were up 0.3 percent as
of Tuesday. However, the trust has seen an outflow of nearly 15
tonnes so far this year. 
    Gold stalled below $1,700 an ounce in early January and has
struggled to break through key resistance at the 50-day moving
average of $1,690, which has capped prices for the last five
sessions, frustrating buyers.
        
    INDIAN BUYING SLACKENS
    Demand in the physical gold market remained strong in most
of Asia, but buying by major bullion consumer India was expected
to pause in the next few days while the government provides
details on tax changes this week, analysts said.
    The Indian government lifted the import duty on refined gold
to 6 percent, from 4 percent, and more than doubled the import
duty on gold dore bars and ores.
    In silver markets, a strong inflow into silver-backed
exchange-traded funds has helped spot silver prices rally more
than 6 percent so far this year.
    Holdings of iShares Silver Trust, the world's largest
silver ETF, was up nearly 6 percent versus the end of 2012.
    Spot silver rose to a five-week high of $32.44 an
ounce, extending its rally to a seventh day. It was last up 0.2
percent at $32.25.
    Among platinum group metals, spot platinum was down
0.5 percent to $1,684.99, while palladium edged down 0.1
percent to $723, after the PGMs rallied last week on the back of
output cuts in South Africa and better hopes for auto demand.
 2:28 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold FEB   1686.70  -6.50  -0.4  1683.10 1694.80  122,457
 US Silver MAR  32.439  0.262   0.8   32.100  32.485   32,286
 US Plat APR   1691.80  -6.70  -0.4  1689.20 1704.60    7,395
 US Pall MAR    726.20  -3.70  -0.5   722.70  728.80    2,711
                                                              
 Gold          1684.96  -6.64  -0.4  1684.06 1695.00         
 Silver         32.250  0.060   0.2   32.120  32.440
 Platinum      1684.99  -8.39  -0.5  1691.00 1700.00
 Palladium      723.00  -1.00  -0.1   725.50  726.50
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        161,903   147,126   173,873     12.64   -0.36
 US Silver       34,090    42,245    53,357     21.15   -0.94
 US Platinum      7,500    16,119    10,804     17.06   -1.07
 US Palladium     2,766     3,260     4,806                  
                                                              
   

 (Additional reporting by Jan Harvey and Clare Denina in London;
Editing by Chizu Nomiyama and Nick Zieminski)
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