* Strong U.S. producer prices, manufacturing data weigh
* US economy grew at moderate pace late last year -Fed
* China grants gold import licenses to ANZ, HSBC
* Coming up: U.S. consumer price index Thursday
(New throughout, updates prices and market activity, adds
details from Fed's Beige Book)
By Frank Tang and Clara Denina
NEW YORK/LONDON, Jan 15 Gold fell for a second
session on Wednesday as the dollar rallied after data showed
U.S. producer prices rose sharply in December even though there
were few signs of sustained price pressures.
The Labor Department said its seasonally adjusted producer
price index rose 0.4 percent in December, the biggest rise in
The Federal Reserve's Beige Book report also showed the U.S.
economy kept growing at a moderate pace from late November
through the end of 2013, with some regions expecting a pick-up
Analysts said gold's near 3 percent gain year-to-date was
supported by speculation that the Federal Reserve may be more
cautious in tapering its monetary stimulus after last Friday's
disappointing nonfarm payrolls report.
"But we suspect that the complex will find it hard to
sustain these gains over the course of the next few weeks,
especially as the next Fed meeting draws near later this month,"
said Edward Meir, metals analyst at brokerage INTL FCStone.
The next meeting of the Federal Open Market Committee is on
Spot gold dropped 0.4 percent to $1,240.15 an ounce
by 3:37 p.m. EST (2037 GMT).
U.S. COMEX gold futures for February delivery settled
down $7.10 at $1,238.30 an ounce, with trading volume about 45
percent below its 250-day average, preliminary Reuters data
Bullion was under pressure as the dollar index gained around
0.5 percent, up for a second day on strong U.S. regional
manufacturing and the wholesale price data.
A second day of gains in U.S. equities, led by strong
earnings from Bank of America Corp, also reduced gold's
safe-haven appeal. The S&P 500 index climbed about 0.5 percent.
As a gauge of investor sentiment, holdings in the world's
largest gold-backed exchange-traded fund, SPDR Gold Trust,
fell 3.56 tonnes to a five-year low of 789.56 tonnes on Tuesday.
In physical-market news, China has granted licences to
import gold to ANZ and HSBC, the first two
foreign banks, sources told Reuters, as efforts to open the
world's biggest physical bullion market gather pace.
Among other precious metals, silver fell 0.3 percent
to $20.15 an ounce. Platinum dropped 0.2 percent to
$1,423.75 an ounce, while palladium was up 0.8 percent at
$739.50 an ounce.
Platium group metals failed to react to news that South
Africa's Association of Mineworkers and Construction Union
(AMCU) said it would not hesitate to call a strike in the
platinum industry over wage negotiations.
3:37 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1238.30 -7.10 -0.6 1233.50 1244.60 96,662
US Silver MAR 20.134 -0.148 -0.7 19.905 20.270 27,985
US Plat APR 1428.60 -5.20 -0.4 1415.10 1432.90 8,258
US Pall MAR 744.00 5.10 0.7 733.95 748.10 3,652
Gold 1240.15 -4.56 -0.4 1234.60 1245.00
Silver 20.150 -0.060 -0.3 19.950 20.250
Platinum 1423.75 -2.50 -0.2 1417.25 1428.50
Palladium 739.50 6.10 0.8 735.60 744.75
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 108,500 132,896 187,344 18.09 0.11
US Silver 29,889 38,394 57,353 24.85 -0.55
US Platinum 8,322 13,443 12,746 16.95 0.31
US Palladium 3,737 3,088 5,849 16.85 -0.49
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by William Hardy and Elaine Hardcastle)