PRECIOUS-Gold down 1.5 pct on Wall Street gains, economic hopes

Tue Apr 2, 2013 3:56pm EDT

* S&P 500 within striking distance of all-time high
    * Silver down 2.5 percent, hits eight-month low
    * Platinum group metals down despite strong U.S. auto sales
    * Coming up: U.S. ADP private-sector jobs report Wednesday

 (Updates market details, prices)
    By Frank Tang
    NEW YORK, April 2 (Reuters) - Gold fell 1.5 percent on
Tuesday, its biggest one-day drop in more than a month, as
economic optimism lifted U.S. equities to near a record high and
weakened bullion's safe-haven appeal.
    Silver dropped almost 3 percent to an eight-month low, and
platinum group metals declined sharply, ignoring higher U.S.
auto sales results.
    Bullion's losses snowballed through the session as the U.S.
equities benchmark S&P 500 index climbed to within
striking distance of an all-time intraday high. 
    "The hot money is going toward the S&P 500 right now," said
Jeffrey Sica, chief investment officer of SICA Wealth
Management, which oversees more than $1 billion in assets.
    "There is an overwhelming sentiment that growth will remain
slow and not inflationary, and that has eliminated some of the
momentum investors in gold," Sica said.
    The gold market could take a cue from Friday's Labor
Department snapshot of the U.S. job market, also an important
gauge for Federal Reserve monetary policy. Signs of economic
improvement could prompt the Fed to halt its bullion-friendly
bond-buying program earlier than expected.
    Spot gold fell 1.4 percent to $1,575.41 by 3:28 p.m.
EST (1928 GMT), having earliest hit $1,573.39, its lowest price
since March 8.
    U.S. gold futures for June delivery settled down
$24.90 to $1,575.10 an ounce, with trading volume about 25
percent below the 30-day average, preliminary Reuters data
showed.
    U.S. equities rose 0.5 percent, led by healthcare stocks
after a government decision raised hopes of higher profits,
diverting investors' focus away from precious metals. 
    Easing euro zone fears after Cyprus clinched a $10 billion
international bailout last week also dampened safe-haven buying
in gold, analysts said.

    SILVER, PLATINUM GROUP METALS DOWN
    Silver extended losses a day after it had fallen 20 percent
from the high it set in October to be in a bear market.
    Silver earlier fell to its lowest level since
mid-August at $27.16 an ounce. It was later down 2.6 percent to
$27.29 an ounce.
    The metal, which surged to a record high near $50 in April
2011 and only to plummet two weeks later, tends to be more
speculative than gold and other precious metals.
    Platinum group metals have now digested the long-term
implication on demand after U.S. sales of sport-utility vehicles
and pickup trucks jumped in March. 
    More than half of the world's platinum and palladium output
are used by the auto industry as catalytic converters to clean
tailpipe exhaust fumes.
    Platinum was down 1.4 percent to $1,568.50 an ounce,
while palladium fell 1.6 percent to $766.75 an ounce.
 3:28 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1575.10 -24.90  -1.6  1574.10 1602.60    2,235
 US Silver MAY  27.248 -0.696  -2.5   27.150  28.140   53,348
 US Plat APR   1571.80 -24.60  -1.5  1572.70 1595.80       75
 US Pall JUN    769.40 -14.55  -1.9   766.20  782.55    3,374
                                                               
 Gold          1575.41 -22.99  -1.4  1573.39 1603.60         
 Silver         27.290 -0.720  -2.6   27.160  28.170
 Platinum      1568.50 -22.09  -1.4  1573.00 1594.00
 Palladium      766.75 -12.25  -1.6   769.52  779.75
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        160,849   210,333   172,285     13.49    0.31
 US Silver       65,785    56,448    54,663     20.53    2.03
 US Platinum      7,855    16,870    11,734     14.27    0.15
 US Palladium     3,408     7,344     7,471                  
                                                               
 

 (Additional reporting by Clara Denina in London; editing by
John Wallace and Leslie Gevirtz)
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