* Technical selling weighs after failure to break $1,260/oz
* Speculation on more Fed stimulus cuts
* Chinese physical gold demand slows
* Coming up: U.S. weekly jobless claims Thursday
By Frank Tang and Veronica Brown
NEW YORK/LONDON, Jan 22 Gold prices fell on
Wednesday, extending the previous session's 1 percent pullback,
due to technical weakness and strength in the dollar.
Platinum prices climbed on supply worries as South Africa's
Impala Platinum shut its mine a day before a planned strike over
Analysts said bullion's positive start to 2014 looked to be
fading due to the prospects of an improving U.S. economy and
expectations for further Federal Reserve stimulus reduction.
Gold's repeated failure to break above key technical
resistance at $1,260 an ounce prompted investors to take
profits. On Tuesday, gold reversed early gains to end nearly 1
percent lower for its biggest one-day drop so far this year.
"Having once again seen that the 'seller' at the
$1,250-1,255 level was formidable ... we have no choice but to
reduce our exposure a bit," said independent trader Dennis
Spot gold fell 0.4 percent to $1,235.80 per ounce on
the day by 4:15 p.m. EST (2115 GMT).
U.S. COMEX gold futures for February delivery settled down
$3.20 at $1,238.60 an ounce.
Turnover was weaker than usual, with trading volume at about
half of its 250-day average, preliminary Reuters data showed.
A stronger dollar also triggered profit-taking in the
Dealers and analysts said concerns about further trimming of
U.S. central bank stimulus, which weighed on prices last year,
were back on the agenda.
The Federal Reserve holds its next policy meeting on Jan.
28-29 when markets think the U.S. central bank will announce a
second cut to its massive monthly bond purchases, which had
burnished gold's inflation-hedge appeal.
In other market news, sources said banks involved in the
gold fix are reviewing the mechanics of its process to try to
ensure that the benchmark complies with upcoming regulations.
CHINA PREMIUMS EASE
Asia-based traders said prices could fall further as Chinese
physical purchases were also slowing after strong demand earlier
this year for the Lunar New Year holiday at the end of January.
Platinum was up 0.3 percent at $1,452.74,
consolidating after hitting a three-month peak recently as
strikes were set to begin on Thursday at the South African mines
of top producers.
Impala Platinum shut all its South African operations on
Wednesday, a day before the planned strike over wages across the
country's platinum belt by the hardline Association of
Mineworkers and Construction union (AMCU).
Silver fell 0.6 percent to $19.73 per ounce, while
palladium inched up 7 cents to $743.97.
4:15 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1238.60 -3.20 -0.3 1235.50 1243.50 78,591
US Silver MAR 19.839 -0.031 -0.2 19.735 19.940 17,026
US Plat APR 1462.40 8.90 0.6 1447.80 1465.90 8,192
US Pall MAR 748.85 0.80 0.1 743.25 749.65 1,894
Gold 1235.80 -5.31 -0.4 1236.48 1243.70
Silver 19.730 -0.120 -0.6 19.780 19.930
Platinum 1452.74 3.99 0.3 1450.25 1461.75
Palladium 743.97 0.07 0.0 745.75 747.25
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 98,092 133,021 186,989 16.52 -0.43
US Silver 18,193 37,981 57,249 25.85 1.68
US Platinum 8,315 12,487 12,646 15.23 0.78
US Palladium 1,995 2,902 5,847 16.61 0.28
(Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Stephen Powell, Marguerita Choy and Jonathan Oatis)