March 20, 2014 / 10:46 AM / 6 years ago

PRECIOUS-Gold flat on Fed plans, easing Ukraine tensions

* Unexpectedly hawkish Fed comments pressure gold
    * Easing tensions over Ukraine pressure bullion
    * Amplats unveils wage deal with NUM; AMCU strike ongoing
    * Coming up: CFTC weekly Commitments of Traders report Fri

 (Adds comment, second byline, dateline, updates market
activities)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, March 20 (Reuters) - Gold prices were
little changed on Thursday, helped by bargain hunting after the
metal's sharp drop the previous day on comments from Federal
Reserve Chair Janet Yellen that suggested U.S. interest rates
could rise sooner than expected.
    Earlier Thursday, the metal fell as the dollar rallied for a
second straight day after Yellen said the U.S central bank will
probably end its massive bond-buying program this fall, and
could start raising interest rates around six months later.
 
    Bullion's rebound was limited on easing geopolitical
tensions after Russian President Vladimir Putin signed a treaty
on Tuesday making Crimea part of Russia again but said he did
not plan to seize any other regions of Ukraine.
    "Gold's rally and its subsequent pare back this month is a
reflection of the safe haven price premium built over the
Crimean standoff between Ukraine and Russia along with the
consequent easing of tensions," said James Steel, chief precious
metals analyst at HSBC.
    Spot gold extended losses to $1,320.24 an ounce on
Thursday, its lowest since Feb. 28. It was down 0.1 percent at
$1,329.84 an ounce by 2:57 p.m. EDT (1857 GMT).
    U.S. gold futures for April delivery settled down
$10.80 an ounce at $1,330.50, with trading volume about 10
percent above its 30-day average.
    Gold prices dropped about 2 percent on Wednesday. Record low
interest rates, which cut the opportunity cost of holding
non-yielding bullion above other assets, had been a key factor
driving the precious metal to all-time highs in recent years.
    "The Fed... (is) nurturing the ground for a change in
rhetoric down the line, and maintaining the pace of QE tapering
which will ultimately see it run out before the end of 2014,"
VTB Capital analyst Andrey Kryuchenkov said. 
    Concerns that a confrontation between Russia and the West
over Ukraine could escalate battered stock markets and sent gold
to six-month highs near $1,400 an ounce earlier this month. 
    Analysts said geopolitical tensions should still underpin
gold prices despite recent weakness.
    "The risk related to Ukraine has not gone away, but moved to
the sidelines for the time being," Saxo Bank's head of
commodities research, Ole Hansen, said.
    In physical market news, gold jewellery exports from number
two consumer India edged up 1 percent year-on-year in February
to $718.36 million, an industry body statement said on Thursday.
 
    Among other precious metals, silver fell 1.2 percent
to $20.31 an ounce. 
    Platinum was down 0.8 percent at $1,427.75 an ounce.
Prices extended losses after number one miner Anglo American
Platinum said it had signed a new wage agreement with
the NUMSA union, although a strike by members of the AMCU union
has continued into an eighth week. 
    Palladium was up 0.6 percent at $766.25 an ounce.
Standard Bank is set to list South Africa's first
palladium-backed exchange-traded fund on the Johannesburg Stock
Exchange on Monday, the bank said late on Wednesday.
 
2:57 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold APR   1330.50 -10.80  -0.8  1320.80 1335.30  155,452
US Silver MAY  20.430 -0.396  -1.9   20.140  20.730   43,543
US Plat APR   1434.80 -16.90  -1.2  1424.20 1454.00   14,675
US Pall JUN    771.65   3.45   0.4   746.30  772.70    8,123
Gold          1329.84  -1.00  -0.1  1320.90 1334.60         
Silver         20.310 -0.240  -1.2   20.170  20.700
Platinum      1427.75 -11.85  -0.8  1425.00 1449.25
Palladium      766.25   4.75   0.6   748.00  770.00
TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold        185,311   170,341   185,495     17.76    0.00
US Silver       46,053    73,784    58,191     27.54   -0.10
US Platinum     19,148    13,087    13,136      19.7    0.66
US Palladium     8,261     8,138     5,690     21.39   -0.59

 (Additional reporting by Lewa Pardomuan in Singapore; editing
by Keiron Henderson, Jane Bair and Andrew Hay)
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