PRECIOUS-Gold rises on bargain hunting, snaps 3-day drop

Tue Sep 24, 2013 3:31pm EDT

* Bargain hunting helps gold reverse early loss
    * Barrick Gold CEO in talks on further asset sales
    * SPDR inflows drop again, physical demand weak

 (Adds trader comment, second byline, dateline, updates market
activity)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Sept 24 (Reuters) - Gold rose on Tuesday as
physical buying at lower prices and technical support helped
bullion snap a three-day losing streak. 
    Earlier in the session, the precious metal was down after
U.S. economic data showed slowing growth in U.S. home prices in
July and a dip in consumer confidence this month.
 
    Gold later turned higher on bargain hunting and technical
buying after bullion rebounded from a session low near $1,300 an
ounce.
    "Buyers have been stepping in each time gold holds support
down near $1,300 an ounce, which looks like a short-term bottom
for now," said Michael Matousek, head trader at U.S. Global
Investors, which has about $1.2 billion in mutual-fund assets.
    "Investors are now adjusting positions against the
uncertainty on Fed tapering," he said.
    Spot gold was up 0.2 percent at $1,323.70 an ounce by
3:13 p.m. EDT (1913 GMT). 
    U.S. gold futures for December delivery settled down
$10.70 an ounce at $1,316.30, with trading volume in line with
its 30-day average, preliminary Reuters data showed.
    New York Fed President William Dudley said on Monday that
the U.S. central bank could still reduce its support for the
economy later this year, while St. Louis Fed President James
Bullard said on Friday that stimulus could be scaled back in
October, depending on economic data.
    "Gold is falling because markets are now expecting an
improvement in the next U.S. labour market next week, which
could lead to the Fed tightening, as the Fed's decision is data
dependent," Quantitative Commodity Research owner Peter Fertig
said.

    WEAK PHYSICAL DEMAND
    Gold premiums across Asia remained weak due to subdued
physical demand ahead of what is typically a strong buying
period for top consumers India and China as they head into 
wedding and festival seasons.
    Moves by India to cut gold imports as it wrestles with its
ballooning current account deficit have been keeping buyers at
bay.
    In gold mining news, Barrick Gold Corp is in talks
on further asset sales, with the focus on divesting smaller,
higher-cost mines, Chief Executive Jamie Sokalsky told Reuters
on Tuesday. 
    As a gauge of investor interest, holdings of SPDR Gold Trust
, the world's largest gold-backed exchange-traded fund,
fell 0.1 percent on Monday from Friday, having shed another
tonne last week. That has brought its total outflow for the year
to 440 tonnes. 
    In other precious metals, silver gained 0.6 percent
to $21.72 an ounce. Platinum rose 0.6 percent to
$1,423.49 an ounce and palladium climbed 0.9 percent to
$718.75 an ounce.
    
 3:13 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1316.30 -10.70  -0.8  1305.50 1329.40  147,363
 US Silver DEC  21.586 -0.271  -1.2   21.325  22.035   41,169
 US Plat OCT   1418.80  -7.10  -0.5  1416.10 1433.00   13,881
 US Pall DEC    720.00   2.05   0.3   711.40  722.25    2,315
                                                               
 Gold          1323.70   2.16   0.2  1306.65 1328.96         
 Silver         21.720  0.120   0.6   21.330  21.990
 Platinum      1423.49   7.89   0.6  1421.00 1430.00
 Palladium      718.75   6.75   0.9   713.75  719.75
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        159,846   165,055   180,370      22.8   -4.78
 US Silver       42,555    67,891    57,870     35.12    1.74
 US Platinum     21,872    11,884    12,434      21.2    0.00
 US Palladium     2,343     6,851     5,900                  
                                                               
    

 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Susan Fenton and Jane Baird)
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