* Bullion's safe-haven appeal limit losses
* Crude plunges, grains down sharply
* Asian physical demand, gold ETF buying strong
(Updates comment, market activity)
By Frank Tang
NEW YORK, Sept 17 Gold fell on Monday,
outperforming tumbling crude oil and grain markets as economic
uncertainty related to last week's monetary stimulus unleashed
by U.S. Federal Reserve boosted the metal's safe-haven appeal.
The metal, a traditional inflation hedge, was down less than
1 percent even though oil plunged more than $5 in a few minutes
on Monday afternoon in a rapid selloff and grain prices led by
soybean futures slid.
"Despite large-scale commodities liquidation, gold is
supported in the high $1,700 range in a flight to quality," said
Zachary Oxman, portfolio manager at futures brokerage TrendMax.
"This suggests there is a worry that inflation and
devaluation of currencies due to central-bank actions are
Spot gold fell 0.7 percent to $1,757.69 an ounce by
3:34 p.m. EDT (1934 GMT), having risen by 2 percent last week.
The metal has gained around 10 percent since late August on
hopes that central bank stimulus around the world would revive a
stagnant global economy.
U.S. COMEX gold futures for December delivery settled
down $2.10 at $1,770.60 an ounce, with trading volume at about
40 percent below its 250-day average, preliminary Reuters data
PHYSICAL, INVESTMENT DEMAND STRONG
Bullion largely traded flat before crude oil's sudden drop.
A third round of bullion-friendly Fed bond-buying known as
quantitative easing (QE), underpinned the metal - a traditional
inflation hedge - to a fourth straight week of gain last week.
"Using QE2 as guidance for potential gains for gold prices,
gold is likely to have priced in the bulk of its move higher,"
said Suki Cooper, precious metals analyst at Barclays Capital.
Cooper said that, however, a pick-up in physical demand in
China and India and record-high holdings in gold-backed
exchange-traded products suggest the metal is likely to hold
onto its recent strength
Analysts said the U.S. central bank's unprecedented move to
tie in monetary stimulus to economic conditions should benefit
A Reuters poll showed the Fed will buy a total of $600
billion of bonds under its new stimulus program and will look
for a U.S. unemployment rate of 7 percent before it halts the
Among other precious metals, silver fell 1.7 percent
at $34.01 an ounce. Platinum dropped 1.9 percent to
$1,662.74 an ounce, while palladium tumbled 3.3 percent
3:34 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold DEC 1770.60 -2.10 -0.1 1756.20 1778.90 108,301
US Silver DEC 34.367 -0.289 -0.8 33.845 34.940 40,738
US Plat OCT 1672.60 -41.10 -2.4 1662.90 1716.00 14,064
US Pall DEC 689.10 -10.20 -1.5 677.80 700.90 4,194
Gold 1757.69 -11.77 -0.7 1755.00 1776.26
Silver 34.010 -0.580 -1.7 33.840 34.850
Platinum 1662.74 -32.26 -1.9 1668.00 1712.00
Palladium 674.20 -22.80 -3.3 680.02 698.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 114,670 137,222 183,973 17.6 -0.85
US Silver 44,420 55,788 53,593 30.24 -3.72
US Platinum 16,447 17,019 9,341 25.22 0.12
US Palladium 4,234 7,907 4,657
(Additional reporting by Amanda Cooper in London; Editing by
Marguerita Choy and Andre Grenon)