PRECIOUS-Gold rebounds from 3-week lows as equities slide

Wed Jun 12, 2013 3:20pm EDT

* SPDR Gold Trust holding steady, seen bullish
    * Physical gold buying subdued in India, China
    * Volatility could continue until FOMC meeting next week
    * Coming up: U.S. retail sales, import/export data Thursday

 (Adds market details, updates prices)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, June 12 (Reuters) - Gold rose on Wednesday
as sharp losses in U.S. equities and a drop in the U.S. dollar
prompted the metal to rebound from the previous session's
three-week low. 
    After earlier rangebound trade with no major U.S. economic
data, bullion extended gains in late morning trade as the S&P
500 index fell almost 1 percent on persistent worries over how
soon central banks will begin to scale back supportive measures.
 
    Better investment demand, reflected by the absence of fresh
outflow from the world's largest gold-backed exchange-traded
fund SPDR Gold Trust, also boosted bullion investor
sentiment.
    "It's a sign that the worst of the money outflows in the
gold market is over. We are still not out of the woods but at
least it shows that the gloom-and-doom forecast of $1,000 gold
is unrealistic for now," said Bill O'Neill, partner at
commodities investment firm LOGIC Advisors.
    Spot gold was up 0.6 percent at $1,387.36 an ounce by
2:46 p.m. EDT (1846 GMT).
    Bullion hit a three-week low at $1,366.65 on Tuesday after
lack of new economic stimulus from the Bank of Japan fueled
worries that other central banks may also withdraw their
support, denting bullion's inflation-hedge appeal.
    U.S. Comex gold futures for August delivery settled
up $15 an ounce to $1,392.
    Turnover was low with trading volume at under 120,000 lots,
sharply below its 30-day average of 220,000, preliminary Reuters
data showed.
    Gold also benefited as the dollar index slipped 0.2
percent, as the greenback tumbled against the yen. 
    Analysts said volatility in financial markets may continue
until the Fed's meeting next week and an accompanying statement
from Fed Chairman Ben Bernanke on Wednesday.
    "Markets will however wait for cues from the Fed next week,"
Pradeep Unni, a senior analyst at Richcomm Global Services,
said. "Lower imports from India after the duty hike will also be
negative for gold."
    
    BUYING SOFT IN INDIA, CHINA
    Demand was subdued in India, the world's largest gold
consumer, which last week moved to cut gold imports by lifting
import duties to 8 percent. Gold imports have been a major
contributor to India's wide current account deficit.
 
    A lack of physical trading in China, whose markets are shut
due to the Dragon Boat Festival holiday, further undermined
gold, dealers said.
    Bullion held by SPDR Gold Trust was unchanged after the ETF
reported its largest inflow in over a month on Monday, of 2.7
tonnes. Its holdings remained near four-year lows, however, down
340 tonnes this year. 
    Among other precious metals, silver was up 0.6
percent at $21.73 an ounce. Platinum dropped 0.4 percent
to $1,474.24 an ounce, while palladium rose 0.5 percent
to $753.22 an ounce.
 2:46 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1392.00  15.00   1.1  1372.20 1394.00  105,383
 US Silver JUL  21.796  0.150   0.7   21.455  21.950   33,469
 US Plat JUL   1482.30   2.40   0.2  1468.00 1490.70    8,705
 US Pall SEP    757.05   4.55   0.6   750.25  759.30    2,023
                                                               
 Gold          1387.36   8.37   0.6  1374.73 1394.26         
 Silver         21.730  0.120   0.6   21.600  22.010
 Platinum      1474.24  -5.26  -0.4  1470.00 1489.00
 Palladium      753.22   3.72   0.5   752.50  756.00
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        112,629   219,941   181,510     21.46   -1.09
 US Silver       46,024    53,807    56,109     33.31    1.38
 US Platinum     10,237    11,833    11,679     22.96    0.38
 US Palladium     2,117     6,342     5,571                  
                                                               
    

 (Editing by Jason Neely and Nick Zieminski)
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