* Traders hold back big bets on strong U.S. data
* U.S. economic performance remains mixed - Fed official
* India increases gold duty again
(Recasts, updates prices)
By A. Ananthalakshmi
SINGAPORE, Aug 14 Gold steadied on Wednesday
after dropping more than 1 percent in the previous session, but
worries over when the U.S. Federal Reserve would begin tapering
its bullion-friendly stimulus continued to drag on prices.
The Fed's bond buying is tantamount to printing money and a
pull back in the scheme would hurt gold's appeal as a hedge
against inflation. Uncertainty over the timing of the roll back
has already pushed the metal down 21 percent this year, after 12
"What would be extremely welcome is some clarity," said
analyst Dominic Schnider of UBS Wealth Management in Singapore.
"And I think September would be the ideal time to provide
clarity. Some market expectations are shifting towards a
December tapering," he added.
The U.S. economic performance remains too mixed for Fed
policymakers to lay out a detailed path for reducing and
eventually halting their asset-purchasing next month, Atlanta
Fed President Dennis Lockhart said on Tuesday.
Spot gold inched down 0.1 percent to $1,319.31 an
ounce by 0703 GMT, after a sharp 1 percent drop in the previous
session that ended a four-day winning streak.
Tuesday's drop was caused by strong U.S. economic data and
further import curbs by key buyer India.
U.S. retail sales rose in July, data showed on Tuesday,
pointing to an acceleration in consumer spending that could
bolster the case for a Fed tapering.
The next Fed meeting is scheduled for Sept. 17-18. Until
then, markets will scrutinise data to gauge the strength of
"Once the taper is out, it will hit gold once more", though
likely not to the same extent as drops earlier this year,
India hiked the import duty on gold yet again to a record 10
percent and raised excise duty on the metal, as imports jumped
in July despite the government's attempts to strangle supply and
curb demand to rein in dollar spending.
Gold prices in India are likely to rise this week, extending
gains past their four-month high, due to the import duty hike.
"Despite the expectations that gold imports may fall,
India's appetite for bullion is anticipated to pick-up later in
the year due to seasonal demand," HSBC analysts wrote in a note.
Analysts say this could increase further illegal gold supply
Precious metals prices 0703 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1319.31 -1.38 -0.10 -21.21
Spot Silver 21.30 -0.11 -0.51 -29.66
Spot Platinum 1484.25 -13.25 -0.88 -3.31
Spot Palladium 732.50 -4.00 -0.54 5.85
COMEX GOLD DEC3 1318.90 -1.60 -0.12 -21.30 21895
COMEX SILVER SEP3 21.31 -0.04 -0.18 -29.70 7465
COMEX gold and silver contracts show the most active months
(Editing by Himani Sarkar)