* Report saying Fed to continue tapering bond purchases
* Chinese gold demand eases; bullion imports seen falling
* Markets monitor holding changes in SPDR Gold Trust
* Coming up: U.S. jobless claims, existing home sales Thurs
By Frank Tang and Clara Denina
NEW YORK/LONDON, Jan 21 Gold fell about 1
percent on Tuesday, its biggest one-day drop so far in 2014, hit
by widespread speculation that the U.S. Federal Reserve might
announce a further cut in its bond-buying program at a meeting
Traders said signs of a better U.S. economy and expected Fed
stimulus trimming will weigh on gold's investment appeal as a
hedge against inflation.
"I am confident that the Fed is going to continue its
tapering approach. There's been sustained improvement in the
global economic recovery, and that should continue to dampen
safe-haven asset demand," said Phillip Streible, senior
commodities broker at brokerage RJ O'Brien.
A report in the Wall Street Journal on Monday said the Fed
is on track to trim its bond-buying program for the second time
in six weeks as a lackluster December jobs report failed to
diminish the Fed's expectations for solid U.S. economic growth
this year. The U.S. central bank's next meeting is scheduled for
Spot gold was down 0.9 percent at $1,241.76 per ounce
by 2:11 p.m. EST (1911 GMT), having fallen as much as 1.4
percent to a one-week low of $1,235.68.
A lack of major U.S. economic indicators on Tuesday prompted
some gold investors to take profits after the metal posted its
fourth consecutive weekly gain last week.
U.S. gold futures for February delivery settled down
$10.10 at $1,241.80 an ounce.
Trading volume was in line with its 250-day average,
preliminary Reuters data showed. U.S. gold traders returned to
their desks after the market was shut on Monday for the Martin
Luther King Jr. Day holiday.
CHINA DEMAND FADES
Gold purchases in China, the world's biggest buyer of the
metal, have slowed from last week's levels as gold prices have
gained for four straight weeks.
Analysts say Chinese gold imports, the lone bright spot in
an otherwise disastrous year for bullion in 2013, look set to
fall from last year's record levels.
Traders continue to monitor gold investment interest after
data showed that holdings in SPDR Gold Trust, the world's
largest gold-backed exchange-traded fund, posted the first
increase in a month.
Among platinum group metals, platinum fell 1 percent
to $1,447.99 an ounce, while palladium edged down 0.1
percent at $745 an ounce.
Analysts said platinum group metal prices were underpinned
after the chief executives of the world's top three platinum
producers said wage hikes being sought by the AMCU union, which
plans a strike against their South African operations this week,
were "unaffordable and unrealistic."
Silver was down 2.2 percent at $19.82 an ounce, also
its biggest one-day drop this year.
2:11 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1241.80 -10.10 -0.8 1235.10 1262.00 156,546
US Silver MAR 19.870 -0.434 -2.1 19.655 20.435 43,916
US Plat APR 1453.50 -0.60 0.0 1437.00 1473.00 17,286
US Pall MAR 748.05 -0.50 -0.1 741.00 752.25 4,071
Gold 1241.76 -11.43 -0.9 1236.30 1255.85
Silver 19.820 -0.440 -2.2 19.700 20.320
Platinum 1447.99 -13.91 -1.0 1440.75 1466.50
Palladium 745.00 -0.40 -0.1 743.70 747.25
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 184,418 134,427 187,375 16.84 0.32
US Silver 47,741 38,391 57,307 24.17 -0.46
US Platinum 17,336 12,873 12,662 14.45 0.09
US Palladium 4,139 2,967 5,840 16.33 -0.55