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PRECIOUS-Gold falls more than 1 pct as commodities dip
May 1, 2013 / 10:06 AM / 5 years ago

PRECIOUS-Gold falls more than 1 pct as commodities dip

* Gold cuts losses after Fed sticks to stimulus plan
    * Industrial commods down on U.S., China growth concerns
    * Coming up: U.S. productivity, jobless claims Thursday

 (Updates throughout; adds Fed statement, comments)
    By Frank Tang
    NEW YORK, May 1 (Reuters) - A commodities selloff sent gold
prices more than 1 percent lower on Wednesday, the biggest daily
drop since bullion's historic decline in mid-April, although the
metal pared some losses after the Federal Reserve stuck to its
monetary stimulus plan.
    Silver and platinum group metals also trimmed losses after
the U.S. central bank said it would continue buying $85 billion
in bonds each month to keep interest rates low and spur growth,
but added it could lift or taper this pace of purchases
depending on the economy's path. 
    Bullion had lost $225 per ounce between April 12 and 16, its
biggest two-day plunge in over 30 years. Since then, strong
physical demand around the world, especially in top bullion
consumers China and India, has cut that drop by more than half. 
    "I don't believe the fundamental reason of owning gold has
changed one iota," said Michael Cuggino, portfolio manager at
the Permanent Portfolio, which has $15 billion in fund assets. 
    "You still have negative short-term real interest rates, and
easy monetary policies around the world with liquidity being
created," Cuggino said. 
    Spot gold fell 1.3 percent to $1,457.90 an ounce by
3:11 p.m. EDT (1911 GMT). 
    U.S. Comex gold futures for June delivery settled
down $25.90 at $1,446.20 an ounce.
    Turnover was light given gold's moves. Trading volume
totaled around 167,000 lots, about 30 percent below its 30-day
average at 232,300, preliminary Reuters data showed.
    Earlier in the session, gold fell more than 2 percent - its
biggest one-day drop since April 15, when it lost 8.5 percent.
    Industrial commodities tumbled, with signs of
slowing manufacturing growth in the United States and China
weighing on demand hopes and hitting gold's inflation-hedge
appeal. 
    After bullion's sharp drop, shops selling gold coins,
jewelry and bars around the world reported an unprecedented
surge in demand and mints and refineries were working overtime
to keep up. 
    "Some of that out-of-control retail buying has now been
satisfied," said Frank McGhee, head precious metals trader at
Integrated Brokerage Services LLC.
    
    DIVERGENCE BETWEEN ETFS, COINS
    Gold's historic selloff last month has intensified a
disconnect between funds that sold on dissatisfaction over
bullion's underperformance, and individual investors who could
not get enough physical gold coins and bars at bargain prices.
    In April, holdings at the world's largest gold-backed
exchange-traded fund (ETF), SPDR Gold Trust 
, posted the biggest monthly outflow in tonnage
terms since its launch in November 2004.
    In contrast, gold coins and bars, favorites among
longer-term individual investors who want to gain exposure to
the precious metal, soared after gold's spectacular selloff.
    Sales of American Eagle gold coins jumped tenfold
year-on-year in April to 209,500 ounces, the highest level since
December 2009, U.S. Mint data showed.
    Among other precious metals, silver fell 2.3 percent
to $23.71 an ounce. Platinum dropped 1.9 percent to
$1,475.50 an ounce, while palladium was down 1.3 percent
at $685.72.     
 3:11 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1446.20 -25.90  -1.8  1439.70 1477.40  154,179
 US Silver MAY  23.305 -0.839  -3.5   23.230  24.275    1,619
 US Plat JUL   1469.50 -37.70  -2.5  1466.60 1508.90    8,247
 US Pall JUN    684.75 -13.05  -1.9   672.80  700.20    4,330
                                                              
 Gold          1457.90 -18.70  -1.3  1440.85 1477.71         
 Silver         23.710 -0.570  -2.3   23.260  24.340
 Platinum      1475.50 -28.00  -1.9  1468.75 1505.50
 Palladium      685.72  -9.28  -1.3   674.75  697.50
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        166,391   232,336   177,436     21.73    1.46
 US Silver       57,116    76,292    54,882     29.99   -1.97
 US Platinum      8,379    15,403    11,939     18.97   -0.01
 US Palladium     4,576     5,225     5,105                  
                                                              
 

 (Additional reporting by Clara Denina in London and Lewa
Pardomuan in Singapore; Editing by Dale Hudson, James Jukwey and
David Gregorio)

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