PRECIOUS-Gold slips as U.S. equities rise, FOMC in focus

Mon Jun 17, 2013 3:29pm EDT

* US equities market rises on Fed stimulus hopes
    * US gold volume thin, set to hit lowest since April
    * Volume low in CME's new 1,000-oz silver futures contract
    * Coming up: U.S. CPI, housing starts Tuesday

 (Adds hyperlink, market details, updates prices)
    By Frank Tang and Veronica Brown
    NEW YORK/LONDON, June 17 (Reuters) - Gold fell around 0.5
percent in quiet trade on Monday as a Wall Street rally reduced
the need for safe-haven buying and investors awaited this week's
U.S. Federal Reserve meeting for signals on the central bank's
monetary stimulus plan.
    Better-than-expected U.S. retail sales and jobs data
recently has fueled speculation that the Fed could announce a
scaling back of its $85 billion monthly mortgage-bond buyback at
the end of its two-day policy meeting on Wednesday.
 
    The S&P 500 stock index trimmed early gains but
stayed higher on traders' hopes that the Fed will reinforce its
commitment to support the economic recovery. 
    "With very few clear choices left for monetary growth, U.S.
equities continue to show resilience. This has kept the bear
alive in the precious metals market while physical demand
remains firm," said Carlos Perez-Santalla at brokerage Marex
Spectron. 
    Spot gold was down 0.6 percent to $1,381.95 an ounce
by 2:33 p.m. EDT (1833 GMT).     
    U.S. Comex gold for August delivery settled down
$4.50 at $1,383.10, with trading volume at 65,000 lots versus
its 30-day daily average of 217,000, preliminary Reuters data
showed.
    Volume was on track to hit its lowest daily level since
April 1, Reuters data showed.
    Silver fell 1.1 percent to $21.80 an ounce.          
    The CME Group's smaller silver contract, the physically
delivered 1,000-ounce silver futures, begin trading on Monday,
with total trading volume at 25 lots, according to CME's
website. (Link: link.reuters.com/myt88t)
    Turnover of the benchmark 5,000-ounce Comex silver futures
was over 40,000 lots, below its 30-day average at 54,000,
preliminary Reuters data showed. 

    ALL EYES ON THE FED 
    Markets have been volatile since Fed Chairman Ben Bernanke
said last month the bank could scale back its stimulus measures.
Since then, Fed officials have given conflicting signals. 
    "People are looking for more clarity - or not, as the case
may be - on whether the Fed starts to ease off the Quantitative
Easing bandwagon," SocGen analyst Robin Bhar said.
    Most economists expect the Fed to scale back the size of its
bond purchases by year end. 
    Any slowdown in the bond-buying program could lead to higher
interest rates and drive investors from gold into
interest-bearing investments and equities.
    In the physical market, demand in Asia has cooled from peak
levels seen after the mid-April selloff in gold, dealers said.
Bullion is down 17 percent for the year to date after 12 years
of annual gains.  
    Indian purchases of gold have fallen since an import duty
increased earlier this month. The government is trying to narrow
its current account deficit by reducing gold imports.
    Among platinum group metals, platinum was down 1.1
percent to $1,429.74 and palladium dropped 2.3 percent to
$712.47.  

 2:33 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1383.10  -4.50  -0.3  1379.80 1391.40   62,109
 US Silver JUL  21.758 -0.196  -0.9   21.605  22.060   28,484
 US Plat JUL   1434.80 -12.60  -0.9  1432.00 1454.20    9,972
 US Pall SEP    717.85 -13.85  -1.9   713.85  733.40    3,695
                                                               
 Gold          1381.95  -8.25  -0.6  1381.28 1391.61         
 Silver         21.800 -0.240  -1.1   21.720  22.050
 Platinum      1429.74 -15.26  -1.1  1435.50 1452.25
 Palladium      712.47 -17.03  -2.3   716.00  730.04
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold         65,190   216,692   181,429     20.98   -0.13
 US Silver       40,924    54,359    56,475     30.05   -2.23
 US Platinum     13,607    12,505    11,703     22.59    0.31
 US Palladium     3,714     6,357     5,583                  
                                                               
 
 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Anthony Barker, Bob Burgdorfer and Jim Marshall)