April 30, 2013 / 3:46 AM / 4 years ago

PRECIOUS-Gold down 1 pct; ETF holdings hit lowest since Sept 2009

* Gold neutral in $1,448-$1,485 range -technicals
 
    * Coming Up: U.S. Consumer confidence; 1400 GMT

 (Updates prices)
    By Lewa Pardomuan
    SINGAPORE, April 30 (Reuters) - Gold fell 1 percent on
Tuesday, slipping into negative territory after some early
bargain hunting, while daily outflows from exchange-traded funds
highlighted investors' lack of confidence in the precious metal.
    Although gold's appeal as a hedge against inflation may be
burnished by hopes the U.S. Federal Reserve will maintain its
bond-buying programme, surging stock markets could tempt
investors to ditch bullion and shift to equities. 
    Gold fell $14.18 an ounce to $1,461.61 by 0617 GMT.  
  It had gained slightly on Monday on expectations the Fed would
keep the pace of its bond buying unchanged at $85 billion a
month following weaker-than-expected U.S. growth.
    "From a technical point of view, although the rebound has
been relatively solid, it appears to be a more sustained
correction of the fall that we saw from late March, rather than
a turn in trend," said Tim Riddell, head of ANZ Global Markets
Research, Asia.
    "Really what we need to see is a series of closes above
$1,505 to take the pressure off," he said, adding that a drop
below $1,435 could trigger a favoured technical pullback to
$1,300 and potentially even as deep as $1,245.
    U.S. gold for June delivery gave up early gains and
stood at $1,461.10, down $6.30.   
    Cash and U.S. gold futures sank to around $1,321 on April
16, their lowest in more than two years, after a drop below
$1,500 led to a sell-off which stunned investors, and prompted
them to slash holdings of exchange-traded funds.
    Asian shares edged higher on Tuesday, a day after the S&P
500 index ended at an all-time high and as investor risk
appetite was bolstered by expectations the U.S. Federal Reserve
and the European Central Bank will continue with
growth-supportive monetary stimulus measures.  
    
    The SPDR Gold Trust, the world's largest gold-backed
exchange-traded fund, said its holdings fell 0.22 percent to
1,080.64 tonnes on Monday from 1,083.05 tonnes on Friday to
their lowest since September 2009. 
    A weak March employment report in the United States and
other softer signals from the economy seemed to kill off
expectations the Fed could taper the pace of bond buying in
coming months. 
    The Fed is currently buying longer-dated U.S. Treasuries and
mortgage-backed bonds every month and is expected to vote to
keep doing so at the conclusion of a two-day policy-setting
meeting on Wednesday. 
    Fears that central banks' money-printing to buy assets will
stoke inflation have been a key driver in boosting gold, which
rallied to an 11-month high in October last year after the Fed
announced its third round of aggressive economic stimulus.
    In the physical market, buying subsided after a recent rush,
but nearby supply of gold bars, coins and nuggets was tight.
Premiums for gold bars in Hong Kong this week were at their
highest level since October 2011, at up to $3 an ounce to spot
London prices. 
    "The problem in the market is the tight physical supply, but
physical buying has slowed down. It will take time to refine the
metal," said a dealer in Hong Kong.
    Gold prices are expected to only partly recover from the
recent selloff to end 2013 at $1,450 to $1,550 per ounce, which
would see the metal post its first annual decline after 12
unbroken years of gains, a Reuters poll showed. 
      
  Precious metals prices 0617 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1461.61  -14.18   -0.96    -12.72
  Spot Silver        24.08   -0.43   -1.75    -20.48
  Spot Platinum    1489.50  -16.50   -1.10     -2.96
  Spot Palladium    694.00   -2.50   -0.36      0.29
  COMEX GOLD JUN3  1461.10   -6.30   -0.43    -12.81        17381
  COMEX SILVER MAY3  24.03   -0.09   -0.38    -20.51          361
  Euro/Dollar       1.3094
  Dollar/Yen         97.68
 
    

 (Editing by Richard Pullin)

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