* 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 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.
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
Many economists say the Fed could push tapering to March
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
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