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PRECIOUS-Gold slips ahead of Fed meet; fund outflows weigh on sentiment
June 17, 2014 / 3:41 AM / 3 years ago

PRECIOUS-Gold slips ahead of Fed meet; fund outflows weigh on sentiment

* Gold falls after hitting 3-week high in previous session
    * Fed's two-day policy meeting begins later in the day

 (Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, June 17 (Reuters) - Gold fell further from a
three-week high on Tuesday as investors withdrew money from the
top bullion fund at the fastest pace in two months and as
markets nervously waited for a Federal Reserve meeting this
week.
    The metal's fall comes even as most Asian stock markets fell
on the deepening conflict in Iraq and a gas dispute between
Ukraine and Russia sapped investors' appetite for riskier
assets.   
    Spot gold fell 0.6 percent to $1,264.30 an ounce by
0649 GMT. The metal hit a three-week top of $1,284.85 on Monday
before closing down 0.4 percent on profit taking.
    "In the short run, worries of conflict might support gold
prices, but with limited impact," said Chen Min, a precious
metals analyst at Jinrui Futures in Shenzhen.
    Chen said she expects prices to fall towards the end of the
year when talks of higher rates gain momentum in the United
States, just ahead of the expected ending of the Federal
Reserve's bond-buying stimulus. 
    The Fed's two-day policy meeting begins later in the day
with a statement expected on Wednesday. Markets are on the watch
for any signals on when the central bank might begin raising
interest rates. 
    Investor sentiment was bearish as holdings of SPDR Gold
Trust, the top gold-backed exchange traded fund, dropped
4.20 tonnes to 782.88 tonnes on Monday - near a five year low.
 
    The decline is the biggest outflow since mid April. 
    Gold - considered a hedge against political uncertainties
and riskier assets such as equities - could draw support from
the Iraq situation. 
    President Barack Obama considered options for military
action to support Iraq's besieged government, while U.S. and
Iranian officials held talks to stabilize the region, which has
been roiled by the advance of Sunni rebels toward Baghdad. 
    Another supporting factor could be Russia cutting off gas to
Ukraine on Monday in a dispute over unpaid bills that could
disrupt supplies to the rest of Europe and set back hopes for
peace between the former Soviet neighbours. 
    Among other precious metals, platinum and palladium
 ticked higher as markets awaited an end to a five-month
long strike at top producer South Africa.
    
    PRICES AT 0649 GMT
 Metal            Last      Change  Pct chg
                                           
 Spot gold          1264.3   -6.99    -0.55
 Spot silver         19.52   -0.08    -0.41
 Spot platinum     1426.25   -3.25    -0.23
 Spot palladium     808.03   -0.47    -0.06
 Comex gold         1264.8   -10.5    -0.82
 Comex silver       19.555   -0.16    -0.81
 Euro               1.3564                 
 DXY                80.486                 
                                           
 COMEX gold and silver contracts show the
 most active months
 
    

 (Editing by Himani Sarkar and Richard Pullin)

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