February 19, 2014 / 11:22 AM / 6 years ago

PRECIOUS-Gold falls nearly 1 percent after Fed minutes

* Presumption of more $10-bln cuts to bond buys -Fed minutes
    * U.S. wholesale inflation tame
    * Gold outlook weak despite emerging-market jitters -analyst

 (Adds comment, adds details from latest Fed minutes)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Feb 19 (Reuters) - Gold fell almost 1
percent on Wednesday after minutes of the Federal Reserve's
latest policy meeting showed several policymakers wanted to keep
cutting monetary stimulus, weighing down on bullion's
inflation-hedge appeal.
    Minutes of the Fed's Jan. 28-29 policy meeting showed the
officials wanted to drive home the idea that their
asset-purchase program would be trimmed in predictable,
$10-billion steps unless there was a big economic surprise this
year. 
    The precious metal accelerated losses after the Fed minutes,
which also pressured U.S. equities. The strong inverse
correlation between gold and equities earlier this year has
shown signs of weakening lately, traders said. 
    "What the Fed is saying is the economy is strong enough for
it to continue pulling back its bond purchases, and the equities
may continue to rally, so there is not as much a need for
precious metals as a safe haven," said Tom Power, senior
commodity broker at Chicago-based RJO Futures.    
    Spot gold was down 0.8 percent to $1,310.50 an ounce
by 3:33 p.m. (2033 GMT). Bullion has risen around 9 percent so
far this year and touched $1,332.10 an ounce on Tuesday, its
strongest level since Oct. 31, before shedding gains.
    U.S. COMEX gold futures for April delivery settled
down $4 at $1,320.40 an ounce, with volume about 35 percent
below its 30-day average, preliminary Reuters data showed.
    In January, the U.S. central bank opted to trim asset buying
by another $10 billion to $65 billion a month.
    Earlier, gold fell after a Labor Department report showed
little sign of inflation at the wholesale level. Separate
economic data showing U.S. housing starts posted their biggest
drop in almost three years also failed to lift gold.
 
    Gold gained 3 percent over three straight sessions from
Thursday to Monday after last week's weak U.S. manufacturing
output data. Uncertainty over growth in emerging markets also
contributed to the metal's gains.
    "Given all the chaos going on with the emerging markets,
gold's performance is still far from a buoyant market," said
Bill O'Neill, partner at New Jersey-based commodities investment
firm LOGIC Advisors. "I don't think gold is setting itself up
for a major rally."
    Among other precious metals, silver fell 2.1 percent
to $21.43 an ounce. Platinum fell 0.6 percent to
$1,410.75 an ounce, while palladium edged down 0.4
percent to $730.75 an ounce.
    Platinum group metals fell as the chief executive of Anglo
American Platinum said on Wednesday that court action
might be taken to have a four-week strike in South Africa
against it and other platinum producers declared illegal given
alleged violence by the AMCU union. 

 3:33 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1320.40  -4.00  -0.3  1310.30 1323.00   99,780
 US Silver MAR  21.850 -0.048  -0.2   21.445  21.960   53,232
 US Plat APR   1424.50   0.00   0.0  1412.30 1429.80    8,476
 US Pall MAR    735.40  -1.75  -0.2   732.05  739.95    4,840
                                                              
 Gold          1310.50 -10.49  -0.8  1310.83 1322.90         
 Silver         21.430 -0.450  -2.1   21.470  22.010
 Platinum      1410.75  -9.00  -0.6  1415.75 1428.00
 Palladium      730.75  -2.75  -0.4   734.50  739.50
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        108,323   165,303   183,725     16.36   -0.20
 US Silver       72,144    58,548    57,167     27.89    0.72
 US Platinum      8,615    10,904    13,316      18.4    2.05
 US Palladium     7,365     6,241     5,670     15.19   -1.32
                                                              
 
 (Additional reporting by Lewa Pardomuan in Singapore; Editing
by Mark Potter, Pravin Char, Peter Galloway and Paul Simao)
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