* ECB expected to expand asset-buying program
* Holdings of largest gold ETF slip from 18-month high
* GRAPHIC-2016 asset returns: reut.rs/1WAiOSC
(Updates prices; adds comment, second byline, NEW YORK
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, March 9 Gold fell on Wednesday
as oil prices and world stock markets rose, and expectations for
further monetary easing from the European Central Bank prompted
some investors to take profits after the metal's rally to
13-month highs last week.
Outflows were seen from bullion-based exchange-traded funds
after hefty inflows earlier in the year. The largest, SPDR Gold
Shares, said its holdings fell 2.4 tonnes on Tuesday, its
biggest outflow in nearly four weeks.
Spot gold was at $1,252.68 an ounce at 2:36 p.m. EST
(1936 GMT), down 0.6 percent, while U.S. gold futures for
April delivery settled down 0.4 percent at $1,257.40 an ounce.
"The ETFs are showing that things are sliding. Some
investors are starting to pause those purchases in terms of
trying to figure out if this is a relief rally or if things are
starting to change," said Brad Sanderson, vice president of
Commodities at Cohen & Steers in New York.
"The market is slowly trying to decide if things have
changed globally or if (they) need to lighten up and can buy
this back cheaper."
Commerzbank analyst Carsten Fritsch said gold prices were
being weighed down by a combination of earlier strength in the
dollar, rising stock markets and rising bond yields.
"This seems to have sparked some profit-taking," he said.
The euro held firm in choppy trading as investors awaited an
European Central Bank meeting, which they expect will result in
interest rates falling deeper into negative territory and more
bond purchases to help the euro zone economy.
"If the bank does meet market expectations, the euro should
weaken and the dollar should strengthen, so we should see dollar
gold testing the downside," Societe Generale analyst Robin Bhar
The market is also awaiting the U.S. Federal Reserve meeting
Last year, this meeting was seen as a likely opportunity for
the Fed to raise interest rates. However, concerns over the
stability of the global economy and mixed signals from U.S. data
have since caused analysts to revise expectations.
Gold tends to be pressured by rising U.S. interest rates,
which lift the opportunity cost of holding non-yielding bullion
while boosting the dollar, in which it is priced. The Fed lifted
rates for the first time in nearly a decade in December.
Silver was down 0.1 percent at $15.29 an ounce, while
platinum lost 0.5 percent at $973.74 an ounce and
palladium rose 0.9 percent to $561 an ounce.
(Additional reporting by Manolo Serapio Jr in Manila; Editing
by Dale Hudson and Chizu Nomiyama)