* U.S. service-sector index grows, gold under pressure
* China's physical gold import from Hong Kong hit record
* Platinum, palladium reverses losses, fund buying seen
* Coming up: U.S. mortgage, refinancing indexes Wednesday
(Adds market details, updates prices)
By Frank Tang
NEW YORK, Feb 5 Gold fell on Tuesday, retreating
from an initial rally, as solid gains in U.S. equities and an
improving economic outlook weighed on the metal's safe-haven
Palladium and platinum rose on better demand expectations
after data showed the U.S. services sector expanded in January,
while European business optimism hit an eight-month high.
Bullion rose earlier in the session after data showed Hong
Kong's net gold flow to mainland China jumped 47 percent in 2012
to a record high.
The report was consistent with latest official-sector data
showing renewed gold interest among central banks such as
Russia, South Korea and other emerging economies.
"Central banks have been buying gold for months now, and we
(gold futures) really haven't moved. To me it's bearish, as I
would think that we should be much higher," said COMEX gold
options floor trader Jonathan Jossen.
Spot gold was down 0.1 percent to $1,671.80 an ounce
by 2:42 p.m. EST (1942 GMT), retreating from a high of nearly
$1,685 earlier in the session.
U.S. gold futures for April delivery settled down
$2.90 at $1,673.50, with trading volume about 10 percent below
its 30-day average, preliminary Reuters data showed.
Signs that the euro zone economy is stabilizing also
pressured gold. The Markit's Eurozone Composite PMI data showed
a rise to a 10-month high in January, and the encouraging U.S.
service-sector data also drove investors to the equity markets
and out of gold, analysts said.
Gold investors are now digesting a report that the fiscal
2013 U.S. budget deficit will dip to $845 billion after four
straight years of $1 trillion-plus deficits, data from the
Congressional Budget Office showed.
Spot silver edged up 0.2 percent to $31.78.
PALLADIUM, PLATINUM OUTPERFORM GOLD
Platinum and palladium both rose for a third day on Tuesday,
with dealers expecting further gains in coming months as hopes
for improvement in macro-economic data encouraged fund buying in
the autocatalyst metals.
An improving global economic outlook and persistent supply
disruptions in South Africa, the world's largest supplier, have
helped both platinum and palladium to outperform gold and silver
so far this year.
Palladium reversed early losses to rise 1 percent to
$762.47, after setting a fresh 17-month high of $766.22.
Platinum was up 0.4 percent at $1,700.24 an ounce.
Switzerland's net exports of platinum more than tripled and
of palladium jumped more than 50 percent in 2012, data from the
Swiss customs bureau showed on Tuesday. Switzerland is a major
refining and trading hub for the platinum group metals.
Analysts, however, warned of still patchy platinum group
metals (PGMs) demand, with continued weakness in the European
market offsetting improvements in the United States and China.
2:42 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold APR 1673.50 -2.90 -0.2 1667.20 1687.00 145,522
US Silver MAR 31.875 0.159 0.5 31.620 32.115 40,606
US Plat APR 1707.20 9.10 0.5 1687.20 1711.00 10,695
US Pall MAR 765.45 7.65 1.0 745.50 769.00 7,361
Gold 1671.80 -2.20 -0.1 1667.13 1684.50
Silver 31.780 0.060 0.2 31.650 32.090
Platinum 1700.24 7.50 0.4 1689.50 1704.00
Palladium 762.47 7.25 1.0 748.75 766.22
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 157,457 169,482 172,992 13.83 -0.03
US Silver 47,604 42,290 51,697 20.48 0.63
US Platinum 11,458 17,167 10,963 17.12 -0.03
US Palladium 8,261 3,970 4,709
(Additional reporting by Clare Denina in London; Editing by Bob