* Pre-holiday physical gold purchases wind down
* Platinum, palladium take a breather after rally
* Spot gold neutral in $1,657.54-$1,681.70/oz range
* Coming Up: U.S. ISM non-manufacturing PMI; 1500 GMT
(Adds Tokyo gold hitting record high, updates prices)
By Rujun Shen
SINGAPORE, Feb 5 Platinum and palladium fell on
Tuesday from multi-month highs hit in the previous session, as
traders sold into the rally to lock in profits, while gold
Spot palladium dropped $3.25 to $751.97 an ounce by
0809 GMT, heading for its biggest daily decline in nearly a
month. It had peaked at a 17-month high of $759.75 an ounce on
Monday, following a rise for four straight weeks.
An improving global economic outlook has helped platinum and
palladium outperform gold and silver so far this year, as demand
prospects brightened for these metals, mainly used in industrial
production and jewellery.
"The market is probably disappointed from lack of
follow-through after we hit new highs yesterday," said a
Singapore-based trader, adding that overall sentiment remained
bullish in platinum and palladium.
The speculative net longs in U.S. palladium futures and
options spiked nearly 19 percent on the week to 22,532 lots in
the week to Jan 29, up 23 percent so far this year, data from
the U.S. Commodity Futures Trading Commission showed.
Net longs in platinum rose 7 percent on the week to 40,938
contracts, up 46 percent so far this year, CFTC data also said.
Spot platinum edged down $2.75 an ounce to $1,689.99
an ounce, off a four-month high of $1,705.25 hit in the previous
Helping platinum's sentiment, Anglo American Platinum
, the world's largest platinum producer, said it made
its first annual loss last year and warned of growing labour
unrest as it cuts back operations in a bid to restore profit.
Gold has been trapped in a range roughly between $1,660 and
$1,680 an ounce since late last week, as investors await a fresh
catalyst to trigger a more decisive move, with momentum
appearing to be running out after a 12-year rally in prices.
Physical buying interest stalled in Asia as rangebound
prices sapped trading interest, and China's market is winding
down ahead of a week-long Lunar New Year holiday that kicks off
"There was some physical buying interest around $1,660, but
not much at this level," said Ronald Leung, a dealer at Lee
Cheong Gold Dealers in Hong Kong.
"People are mostly waiting for more data from the United
States to assess how the economy is and whether quantitative
easing will continue."
Monetary stimulus was a key driver of gold's rally in the
last few years, and an improving U.S. economy has stirred
concern the Federal Reserve might curtail bond-buying plans.
Spot gold was little changed at $1,673.71. U.S. gold
fell $1.60 an ounce to $1,674.80.
Technical analysis suggested spot gold would remain neutral
in a range between $1,657.54 and $1,681.70 during the day, said
Reuters market analyst Wang Tao.
The most active gold contract on the Tokyo Commodity
Exchange, currently December, hit another record at
5,010 yen a gram.
"The current rally is driven mainly by day-to-day dealing
from speculative individuals as we understand large players have
been reducing open TOCOM positions," said Satoru Yoshida, a
commodity analyst at Dot Commodity.
The dollar index rose to a one-week high, climbing
for a second day, as a rally in the euro currency stalled on
growing worries about political uncertainty in Spain and Italy.
A stronger greenback weighs on commodities priced in
Precious metals prices 0809 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1673.71 -0.29 -0.02 -0.05
Spot Silver 31.67 -0.05 -0.16 4.59
Spot Platinum 1689.99 -2.75 -0.16 10.10
Spot Palladium 751.97 -3.25 -0.43 8.67
COMEX GOLD APR3 1674.80 -1.60 -0.10 -0.06 19016
COMEX SILVER MAR3 31.72 0.00 -0.00 4.91 3102
COMEX gold and silver contracts show the most active months
(Additional reporting by Risa Maeda; Editing by Clarence