* Hopes over fiscal crisis talk weigh on gold
* Profit-taking seen ahead of expected Fed asset buying
* Asian physical gold demand seen supportive
* Coming up: U.S. Fed Open Market Committee statement Weds
(Updates throughout, changes byline, dateline, previously
By Frank Tang
NEW YORK, Dec 11 Gold prices eased on Tuesday,
weighed down by hopes that the U.S. budget crisis can be averted
and ahead of a key Federal Reserve policy statement regarding
its monetary outlook.
Bullion snapped a three-day winning streak, as safe-haven
bids dried up after U.S. House of Representatives Speaker John
Boehner said he remained hopeful that an agreement by the
end-of-year deadline. Boehner, however, did not offer any
concrete signs of progress on talks about the so-called fiscal
Investors also lessened their bullish bets ahead of
Wednesday's Fed Open Market Committee policy statement. The U.S.
central bank is expected to announce monthly bond purchases of
$45 billion, on top of the $40 billion in mortgage-backed
security purchases it announced in September.
"The big money is waiting to see what the news is with the
FOMC before making their move. Gold is becoming less liquid as
there are less bids out there near the year end," said Miguel
Perez-Santalla, vice president of online precious-metals
Spot gold was down 0.2 percent at $1,707.70 an ounce
by 2:16 p.m. EST (1916 GMT).
U.S. COMEX gold futures for February delivery settled
down $4.80 at $1,709.60 an ounce, with volume at 60 percent
below its 30-day average, preliminary Reuters data showed.
Gold prices initially rose with equities on optimism that
ongoing talks between Boehner and President Barack Obama were
enough to avoid tax hikes and spending cuts which could send the
United States back into a recession.
Other traders said the gold market has already factored in
expected Fed stimulus on Wednesday, and a disappointment could
trigger a sell-off.
Prior to Tuesday's pullback, gold had risen 2 percent after
hitting a one-month low on Friday after better-than-expected
U.S. nonfarm payrolls data.
Silver was down 1 percent at $32.85 an ounce.
PHYSICAL GOLD DEMAND STRONG
Despite Tuesday's pullback, physical bullion demand remained
strong, particularly in China, one of the world's top bullion
Gold premiums in Hong Kong rose to their highest in about
five months on Tuesday as Chinese banks stocked up on bullion to
avoid a supply crunch when refineries close shop for the
In South Africa, gold output nearly halved in October from
the same period last year, highlighting the impact of violent
strikes that swept the mining sector.
Among platinum group metals, platinum rose 0.9
percent to $1,632.30, while palladium was down 0.9
percent at $690.20, after it has risen around 15 percent in the
last month, outstripping gains in other precious metals.
2:16 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1709.60 -4.80 -0.3 1706.00 1715.80 71,439
US Silver MAR 33.017 -0.360 -1.1 32.835 33.345 23,997
US Plat JAN 1640.00 16.70 1.0 1616.80 1642.20 13,538
US Pall MAR 696.80 -7.95 -1.1 693.00 703.00 3,238
Gold 1707.70 -3.89 -0.2 1705.53 1714.20
Silver 32.850 -0.340 -1.0 32.790 33.260
Platinum 1632.30 14.05 0.9 1619.50 1639.00
Palladium 690.20 -6.60 -0.9 695.27 700.00
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 74,121 186,657 174,718 13.91 0.19
US Silver 26,041 59,215 52,736 21.24 0.94
US Platinum 16,053 8,394 8,841 17.26 0.45
US Palladium 3,249 6,119 4,769
(Reporting by David Brough in London; Editing by Marguerita