PRECIOUS-Gold falls on dollar rise, awaits Fed statement

Tue Oct 29, 2013 3:25pm EDT

* Dollar index up 0.5 pct after U.S. retail sales data
    * Physical demand weak, Shanghai gold prices at discount
    * Coming up: Fed Open Market Committee policy statement Weds


    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Oct 29 (Reuters) - Gold fell on Tuesday,
retreating from the previous session's five-week high, as a
dollar rise and encouraging U.S. consumer spending data prompted
investors to take profits ahead of a policy decision by the U.S.
Federal Reserve.
    Bullion prices slipped after a gauge of U.S. consumer
spending rose in September, but falling car sales pointed to
sluggish economic growth. 
    The Fed began a two-day policy meeting in which it is widely
expected to confirm it will continue buying bonds at the rate of
$85 billion a month in a policy statement on Wednesday.
    "Investors are keen to see what the Fed will say with regard
to the softening seen in some of the recent U.S macro data and
whether this will impact the central bank's tapering timeline,"
said Edward Meir, metals analyst at futures brokerage INTL
FCStone.
    Many economists say the Fed could push tapering to March
next year. 
    Spot gold was down 0.5 percent to $1,344.89 an ounce
by 2:40 p.m. EDT (1840 GMT). 
    It hit its highest since Sept. 20 at $1,361.60 on Monday, as
disappointing U.S. manufacturing and pending home sales data
reinforced the view the economy is not yet strong enough for the
Fed to start tapering stimulus.
    U.S. gold futures for December delivery settled down
$6.70 an ounce at $1,345.50, with volume about 15 percent below
its 30-day average, preliminary Reuters data showed.
    Gold prices have fallen nearly 20 percent this year in the
expectation of imminent tapering by the Fed.
    The metal has gained 8 percent over the past two weeks, as a
budget battle in Washington and a string of weak economic data
have raised questions over whether it will scale back monetary
stimulus, giving bullion a boost.
    
    ASIAN DEMAND WEAK 
    Physical demand could take a hit on signs of slower buying
by Asian investors and jewelers.
    Chinese gold prices closed lower than global prices on
Tuesday for the first time this year, traders said, as fears of
a credit tightening prompted investors to sell bullion for cash.
  
    As a gauge of investor interest, holdings of the world's
largest gold-backed exchange-traded fund, SPDR Gold Shares
, remained unchanged at 872.02 tonnes on Monday
after falling 4.5 tonnes on Friday. 
    Among other precious metals, silver eased 10 cents to
$22.46 an ounce. Platinum was down 1.1 percent to
$1,454.50 an ounce, while palladium eased 0.1 percent to
$742.72.
    Spot palladium was unchanged at $742.47 an ounce.
 2:40 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1345.50  -6.70  -0.5  1339.80 1360.40  120,306
 US Silver DEC  22.492 -0.046  -0.2   22.300  22.630   29,119
 US Plat JAN   1461.90 -11.00  -0.7  1459.20 1473.50    7,777
 US Pall DEC    747.05  -3.40  -0.5   741.00  748.50    3,755
                                                               
 Gold          1344.89  -6.70  -0.5  1341.03 1360.06         
 Silver         22.460 -0.010   0.0   22.320  22.600
 Platinum      1454.50 -15.50  -1.1  1462.50 1470.50
 Palladium      742.72  -0.78  -0.1   743.52  746.00
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        135,117   158,496   190,467     19.93   -0.14
 US Silver       30,787    43,286    55,752     30.02    0.65
 US Platinum      8,056    13,509    13,009     19.13    0.00
 US Palladium     3,936     4,034     5,637
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