* Spot gold fails to breach 55-day moving average
* ECB's Draghi highlights downside risk to euro zone
* Platinum and palladium down after recent gains
* Coming up: U.S. international trade data Friday
(New update throughout, changes byline, dateline, previously
By Frank Tang
NEW YORK, Feb 7 Gold fell in a volatile session
on Thursday after comments by European Central Bank (ECB)
President Mario Draghi ignited renewed economic fears over the
The metal fell in tandem with U.S. equities and industrial
commodities on recession worries after Draghi's comments
triggered a nearly 1 percent drop in the euro against the
Draghi said that economic activity in the euro area should
gradually recover later in 2013 but there are more negative
risks than positive ones.
Technical selling accelerated gold's losses after the metal
failed to rise above its 55-day moving average, which gold has
failed to close above since late October.
"It was up earlier but couldn't get through a resistance
level," said COMEX gold options floor trader Jonathan Jossen.
"There is no interest in gold."
Spot gold fell 0.3 percent to $1,671.44 an ounce by
1:59 PM EST (1859 GMT), having earlier hit a session low of
$1,662.80 an ounce.
U.S. gold futures for April delivery settled down
$7.50 at $1,671.30 an ounce, with trading volume in line with
its 250-day average, preliminary Reuters data showed.
Also denting sentiment was news that top Federal Reserve
official Jeremy Stein, a member of the powerful Fed board of
governors, said that an extended period of low interest rates
could create risks to financial stability.
Physical gold demand also began to weaken ahead of the long
Lunar New Year break, with premiums for gold bars in Hong Kong
falling from last week's high.
In fundamental news, China's gold production rose for a
sixth consecutive year to hit a record 403 tonnes in 2012,
keeping its ranking as the world's largest bullion producer, the
Shanghai Securities News said on Thursday.
Silver fell 1.1 percent to $31.46 an once.
PLATINUM GROUP METALS RETREAT
Platinum group metals, which are mostly used to make auto
catalytic converters, fell broadly on Thursday.
The group had posted solid gains prior to this week's losses
on a more positive economic outlook and after mining disruptions
in South Africa, as well as a drop in supply from Russia.
Analysts, however, say a short-term correction is likely,
considering strong speculative interest.
UBS analysts said in a note that any risk-off sentiment or
negative economic data would easily trigger an overdue pullback
given the heavy speculative net long positions.
Platinum was down 0.8 percent to $1,719.74 an ounce,
retreating from a high of $1,740 on Wednesday, its strongest
since September 2011.
Palladium fell 1.2 percent to $751 an ounce. The
metal rose as high as $769.50 in the previous session, also its
peak since September 2011.
1:59 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold APR 1671.30 -7.50 -0.4 1663.40 1683.90 169,676
US Silver MAR 31.403 -0.474 -1.5 31.295 31.935 52,037
US Plat APR 1722.30 -14.20 -0.8 1721.10 1743.00 10,425
US Pall MAR 750.45 -14.35 -1.9 749.50 768.35 6,241
Gold 1671.44 -5.67 -0.3 1662.80 1682.90
Silver 31.460 -0.350 -1.1 31.320 31.890
Platinum 1719.74 -13.00 -0.8 1723.00 1738.75
Palladium 751.00 -9.50 -1.2 753.00 765.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 176,011 175,808 172,805 13.64 -0.01
US Silver 60,623 44,350 51,604 20.43 -0.53
US Platinum 10,614 17,279 11,006 17.21 -0.03
US Palladium 7,006 4,435 4,731
(Reporting by Clara Denina in London; Editing by Bob