PRECIOUS-Gold prices fall as euro hits session lows
* Strong euro zone economic data weighs on gold
* Strong technical resistance at $1,695
* Spot silver hits 5-wk high at $32.44
(Adds comments, updates prices)
LONDON, Jan 23 (Reuters) - Gold fell further from this week's one-month high on Wednesday as the euro slid to session lows versus the dollar, with signs of improving global economy, after strong euro area economic figures, capping investors' interest in the metal.
The latest euro zone consumer confidence data showed a rise to -23.9 this month from a December figure of -26.3, suggesting households can help boost the bloc's economic recovery.
Spot gold fell 0.2 percent to $1,688 an ounce by 1534 GMT. It hit a one-month high of $1,695.76 in the previous session but failed to retain upward momentum on lower investment demand and technical resistance.
"We can see rather lacklustre interest for gold right now, with investors withdrawing some money from the gold market (as the global economy shows signs of improvement)," Tobias Merath, global head of commodity research at Credit Suisse said.
"At the moment there is also a bit of portfolio effect going on as gold's returns in 2012 moderated to 7 percent from 18 percent in the previous ten years and were than returns in equities," he added.
"This implies that investors are trimming their positions in gold to adjust their portfolios, preventing the metal from breaking above the key $1,700 level."
The SPDR Gold Trust, the world's top gold ETF, has seen an outflow of nearly 15 tonnes so far this year.
Recent monetary easing in Japan had triggered rallies in equities, which gold has tracked closely in the past days. Accomodative policies are usually seen as positive for gold, as rampant cash printing would prompt currency debasement.
"We continue to see a lot of monetary easing from the Bank of Japan and other central banks, and we think ultimately this will pick up gold sentiment once again," said Standard Bank analyst Walter de Wet.
But gold stalled below $1,700 an ounce in early January and has struggled to break through key resistance at the 55-day simple moving average of $1,695.50, which has capped prices for the last five sessions, frustrating buyers.
"You have the high from January 2 which is $1,695, you have the 55-day simple moving average which has capped it for the last five days at 1695.50," Axel Rudolph, a technical analyst at Commerzbank, said.
"That whole band basically just seems to cap gold. Although it's trying to go higher, it's failed every single time around here," he said.
INDIAN BUYING SLACKENS
Demand in the physical gold market remained strong in the south-east Asian region, but buying by major consumer India was expected to pause in the next few days while the government provides details on tax changes this week, analysts said.
The Indian government lifted the import duty on refined gold to 6 percent from 4 percent and more than doubled the import duty on gold dore bars and ores.
"The news that India is lifting its import taxes on gold temporarily is having a negative impact on sentiment," Standard Bank's de Wet said.
Spot silver rose to a five-week high of $32.44 an ounce, extending a seven-day run higher. It was last seen at $32.18, unchanged from the previous close.
"Silver has outperformed gold year-to-date and its market's supply surplus is being taken up by investors, who tend to buy the metal when risk appetite is on the rise," Merath said.
"We expect further upside for the metal in the short term," he added.
A robust inflow into silver-backed exchange-traded funds has helped spot silver prices rally more than 6 percent so far this year, as the metal's exposure to a quickened pace of economic growth attracted investors.
Holdings of iShares Silver Trust, the world's largest silver ETF, stood at 10,689 tonnes on Jan. 22, up 604.9 tonnes, or nearly 6 percent, from the end of 2012.
In other precious metals, spot platinum was down 0.3 percent to $1,688.49, while palladium lost 0.1 percent to $722.97, staying below last week's multi-month highs, made on the back of output cuts in South Africa and hopes for an improvement in demand.
(Additional reporting by Jan Harvey; Edited by Veronica Brown and Alison Birrane)