March 4, 2014 / 11:11 AM / in 5 years

PRECIOUS-Gold falls 1 percent as Ukraine tensions ease

* Gold pulls back from 4-month high, remains underpinned
    * Putin orders troops in western Russia back to base
    * S&P rises to record high after Monday's tumble
    * Coming up: US ADP private-sector job data Wednesday

 (Adds comment, updates market activities)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, March 4 (Reuters) - Gold fell about 1
percent on Tuesday as assurances from Russia's president that
military force would be a last resort in the Ukraine crisis
prompted investors to take profits from the previous day's
rally.
    Bullion's drop came as U.S. equities measured by the S&P 500
index surged more than 1 percent to a record high after
Russian leader Vladimir Putin ordered troops involved in a
military exercise near the Ukrainian border back to their bases
as he sought to ease tensions. 
    Gold fell alongside safe-haven U.S. Treasury debt following
Monday's broad gain on escalating military tension between
Russia and the West over Ukraine that hammered Russian financial
markets.
    Economic uncertainty related to worries over Ukraine,
however, should underpin gold prices, analysts said.
    "The equities look incredibly vulnerable for a pullback. All
you need is an issue like Ukraine that will lead to global
concerns about the economy," said Tom Power, senior commodity
broker at Chicago-based RJO Futures. "I expect a lot of investor
interest in gold."
    Spot gold fell 0.9 percent to $1,337.86 by 2:10 p.m.
EST (1910 GMT), its worst daily loss in more than a month since
Jan. 30. 
    U.S. COMEX gold futures for April delivery settled
down $12.40 an ounce at $1,337.90. Trading volume is about 10
percent below its 30-day average, preliminary Reuters data
showed.
    The yellow metal rallied nearly 2 percent on Monday as
investors, alarmed by East-West tensions, piled into bullion and
government debt.
    
    PRIVATE INVESTORS BUY
    In the retail gold market, buying among private bullion
investors rebounded in February after three consecutive monthly
drop, said a survey by online precious metals market
BullionVault.
    The Gold Investor Index, which measures the balance of
customers adding to gold holdings over those reducing them, was
up to 53.5 in February from 51.9 in January. A reading of 50
signals an equal number of net gold buyers and sellers.
    In the physical market, India's trade minister said on
Tuesday he had raised the issue of easing some curbs on gold
imports with the finance ministry, as the restrictions were
encouraging smuggling and hurting the gems and jewellery
industry. 
    India lost its spot as the world's biggest gold consumer to
China last year, after the government imposed the restriction on
imports to narrow the current account deficit.
    Among other precious metals, silver dropped 0.7
percent to $21.22 an ounce, while platinum rose 0.5
percent to $1,462 an ounce and palladium gained 1.9
percent to $760.25 an ounce.
 2:10 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1337.90 -12.40  -0.9  1331.20 1352.90  123,575
 US Silver MAR  21.188 -0.260  -1.2   21.010  21.490      919
 US Plat APR   1464.10   3.40   0.2  1442.00 1467.60   12,405
 US Pall MAR    763.70  13.90   1.9   745.70  765.00       69
                                                               
 Gold          1337.86 -12.43  -0.9  1331.70 1352.21         
 Silver         21.220 -0.160  -0.7   21.050  21.500
 Platinum      1462.00   7.50   0.5  1443.00 1465.00
 Palladium      760.25  14.25   1.9   746.50  763.50
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        132,880   141,424   186,063     16.89   -0.05
 US Silver       43,500    75,457    57,709     26.65    1.86
 US Platinum     13,415    10,125    12,924     17.73    0.98
 US Palladium    10,798     8,163     5,588     13.93    1.13
                                                               
   

 (Additional reporting by Lewa Pardomuan in Singapore; Editing
by William Hardy, Marguerita Choy and Andrew Hay)
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