* Strong euro zone consumer morale data weighs on gold
* Gold fails to break technical resistance at 50-day MA
* Silver hits 5-week high, ends up despite weak precious
* Coming up: US Markit manufacturing data, jobless claims
(Adds market details, updates prices)
By Frank Tang
NEW YORK, Jan 23 Gold dropped on Wednesday,
retreating from the previous session's one-month high, as signs
of an improving global economy capped investor interest in
The metal fell for the first time in the last three
sessions, after the European Commission said consumer morale in
the euro zone improved sharply in January. Reuters polls also
showed that the world economy should perform slightly better
this year on recovering Asian growth.
"I don't think there is any reason for investors to own gold
any more as the economy is turning around," said COMEX gold
options floor trader Jonathan Jossen.
Jossen, however, said strong buying interest and dip-buying
has definitely underpinned the price of gold, and that kept gold
from dropping further.
Despite Wednesday's pullback, gold is on track for a fourth
consecutive weekly gain, its longest weekly winning streak since
Spot gold fell 0.4 percent to $1,684.96 an ounce by
2:28 p.m. EST (1928 GMT). It hit a one-month high of $1,695.76
in the previous session but failed to retain upward momentum on
lower investment demand and technical resistance.
U.S. COMEX gold futures for February delivery settled
down $6.50 at $1,686.70 an ounce. Trading volume was on track to
finish in line with its 250-day average, preliminary Reuters
data showed, partially boosted by February-April contract
"We can see rather lacklustre interest for gold right now,
with investors withdrawing some money from the gold market," as
the global economy shows signs of improvement, said Tobias
Merath, global head of commodity research at Credit Suisse.
Bullion holdings at the SPDR Gold Trust, the world's
largest gold-backed exchange-traded fund, were up 0.3 percent as
of Tuesday. However, the trust has seen an outflow of nearly 15
tonnes so far this year.
Gold stalled below $1,700 an ounce in early January and has
struggled to break through key resistance at the 50-day moving
average of $1,690, which has capped prices for the last five
sessions, frustrating buyers.
INDIAN BUYING SLACKENS
Demand in the physical gold market remained strong in most
of Asia, but buying by major bullion consumer India was expected
to pause in the next few days while the government provides
details on tax changes this week, analysts said.
The Indian government lifted the import duty on refined gold
to 6 percent, from 4 percent, and more than doubled the import
duty on gold dore bars and ores.
In silver markets, a strong inflow into silver-backed
exchange-traded funds has helped spot silver prices rally more
than 6 percent so far this year.
Holdings of iShares Silver Trust, the world's largest
silver ETF, was up nearly 6 percent versus the end of 2012.
Spot silver rose to a five-week high of $32.44 an
ounce, extending its rally to a seventh day. It was last up 0.2
percent at $32.25.
Among platinum group metals, spot platinum was down
0.5 percent to $1,684.99, while palladium edged down 0.1
percent to $723, after the PGMs rallied last week on the back of
output cuts in South Africa and better hopes for auto demand.
2:28 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1686.70 -6.50 -0.4 1683.10 1694.80 122,457
US Silver MAR 32.439 0.262 0.8 32.100 32.485 32,286
US Plat APR 1691.80 -6.70 -0.4 1689.20 1704.60 7,395
US Pall MAR 726.20 -3.70 -0.5 722.70 728.80 2,711
Gold 1684.96 -6.64 -0.4 1684.06 1695.00
Silver 32.250 0.060 0.2 32.120 32.440
Platinum 1684.99 -8.39 -0.5 1691.00 1700.00
Palladium 723.00 -1.00 -0.1 725.50 726.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 161,903 147,126 173,873 12.64 -0.36
US Silver 34,090 42,245 53,357 21.15 -0.94
US Platinum 7,500 16,119 10,804 17.06 -1.07
US Palladium 2,766 3,260 4,806
(Additional reporting by Jan Harvey and Clare Denina in London;
Editing by Chizu Nomiyama and Nick Zieminski)