PRECIOUS-Gold drops for fourth day on Fed taper uncertainty

Tue Nov 12, 2013 2:40pm EST

* Dollar gain, rising Treasury yields pressure gold
    * Physical demand in Asia remains subdued - dealers
    * Johnson Matthey expects market deficit in platinum
    * Coming up: U.S. Federal Budget on Wednesday

 (Adds analyst comment, second byline, dateline, updates market
activity)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Nov 12 (Reuters) - Gold fell 1 percent on
Monday, dropping to its lowest in nearly a month, as bullion
investors reduced positions on lingering fears that the U.S.
Federal Reserve will soon scale back monetary stimulus.
    Bullion extended its losing streak to a fourth consecutive
day, while silver fell almost 3 percent. Palladium also fell
sharply after a closely watched industry report forecast
narrower market deficit in the autocatalyst metal.
    Gold has lost nearly 4 percent over the past four sessions,
as last week's surprisingly strong October U.S. jobs growth data
boosted speculation that the Fed will taper its $85
billion-a-month bond purchases by the end of the year. 
    A resurgent dollar and record high in U.S. stocks also
pressured bullion's safe-haven appeal, analysts said.
    "There is still too much uncertainty over the timing of when
the Fed will taper and as such (we) think gold will remain
rangebound in the coming months," TD Securities precious metals
trading desk said in a note.    
    Spot gold was down 1.1 percent at $1,268.81 by 2:12
p.m. EST (1912 GMT), having hit its lowest since Oct. 15 at
$1,267.04 an ounce earlier in the session. 
    U.S. Comex gold futures for December settled down
$9.90 at $1,271.20 an ounce, with trading volume about 30
percent below its 250-day average, preliminary Reuters data
showed.
    The dollar climbed to a one-month peak against the yen on
Tuesday expected Fed tapering, while the 10-year U.S. yield
 rose towards a near two-month high at 2.76 percent.
  
    As gold pays no interest, the rise in returns from U.S.
bonds and other markets is seen as negative for the metal.
    Silver fell 2.9 percent to $20.71 an ounce.
    Precious metals specialist and refiner Johnson Matthey said
that strong investment and industrial demand will push the
platinum market in 2013 into its biggest deficit for 14 years.
 
    The Johnson Matthey report now estimates palladium market's
deficit to narrow to 740,000 ounces in 2013 from 1.15 million
ounces in 2012. 
    Platinum was up 0.1 percent at $1,429.40 an ounce,
while palladium fell 1.9 percent to $737.43 an ounce.
 2:12 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1271.20  -9.90  -0.8  1268.00 1285.40  113,567
 US Silver DEC  20.778 -0.504  -2.4   20.690  21.355   46,938
 US Plat JAN   1439.60   7.20   0.5  1431.70 1444.50    6,431
 US Pall DEC    742.35 -12.20  -1.6   738.75  753.95    4,676
                                                               
 Gold          1268.81 -14.01  -1.1  1269.58 1284.91         
 Silver         20.710 -0.620  -2.9   20.740  21.350
 Platinum      1429.40   1.16   0.1  1434.00 1440.75
 Palladium      737.43 -14.01  -1.9   741.75  753.50
                                                               
 TOTAL MARKET              VOLUME   30-D ATM VOLATILITY
                CURRENT   250D AVG   CURRENT     CHG
 US Gold        127,309   189,283     23.18   -1.01
 US Silver       57,832    58,610     35.14    1.70
 US Platinum      6,560    12,978     20.36    0.00
 US Palladium     5,244     5,806                  
                                                               
 

 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by David Evans, Ron Askew and Marguerita Choy)