PRECIOUS-Gold slips as U.S. equities rise, FOMC in focus
* US equities market rises on Fed stimulus hopes
* US gold volume thin, set to hit lowest since April
* Volume low in CME's new 1,000-oz silver futures contract
* Coming up: U.S. CPI, housing starts Tuesday
(Adds hyperlink, market details, updates prices) NEW YORK/LONDON, June 17 (Reuters) - Gold fell around 0.5 percent in quiet trade on Monday as a Wall Street rally reduced the need for safe-haven buying and investors awaited this week's U.S. Federal Reserve meeting for signals on the central bank's monetary stimulus plan. Better-than-expected U.S. retail sales and jobs data recently has fueled speculation that the Fed could announce a scaling back of its $85 billion monthly mortgage-bond buyback at the end of its two-day policy meeting on Wednesday.
The S&P 500 stock index trimmed early gains but stayed higher on traders' hopes that the Fed will reinforce its commitment to support the economic recovery. "With very few clear choices left for monetary growth, U.S. equities continue to show resilience. This has kept the bear alive in the precious metals market while physical demand remains firm," said Carlos Perez-Santalla at brokerage Marex Spectron. Spot gold was down 0.6 percent to $1,381.95 an ounce U.S. Comex gold for August delivery settled down $4.50 at $1,383.10, with trading volume at 65,000 lots versus its 30-day daily average of 217,000, preliminary Reuters data showed. Volume was on track to hit its lowest daily level since April 1, Reuters data showed. Silver fell 1.1 percent to $21.80 an ounce. The CME Group's smaller silver contract, the physically delivered 1,000-ounce silver futures, begin trading on Monday, with total trading volume at 25 lots, according to CME's website. (Link: http://link.reuters.com/myt88t) Turnover of the benchmark 5,000-ounce Comex silver futures was over 40,000 lots, below its 30-day average at 54,000, preliminary Reuters data showed.
ALL EYES ON THE FED Markets have been volatile since Fed Chairman Ben Bernanke said last month the bank could scale back its stimulus measures. Since then, Fed officials have given conflicting signals. "People are looking for more clarity - or not, as the case may be - on whether the Fed starts to ease off the Quantitative Easing bandwagon," SocGen analyst Robin Bhar said. Most economists expect the Fed to scale back the size of its bond purchases by year end. Any slowdown in the bond-buying program could lead to higher interest rates and drive investors from gold into interest-bearing investments and equities. In the physical market, demand in Asia has cooled from peak levels seen after the mid-April selloff in gold, dealers said. Bullion is down 17 percent for the year to date after 12 years of annual gains. Indian purchases of gold have fallen since an import duty increased earlier this month. The government is trying to narrow its current account deficit by reducing gold imports. Among platinum group metals, platinum was down 1.1 percent to $1,429.74 and palladium dropped 2.3 percent to $712.47.
2:33 PM EDT LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold AUG 1383.10 -4.50 -0.3 1379.80 1391.40 62,109 US Silver JUL 21.758 -0.196 -0.9 21.605 22.060 28,484 US Plat JUL 1434.80 -12.60 -0.9 1432.00 1454.20 9,972 US Pall SEP 717.85 -13.85 -1.9 713.85 733.40 3,695 Gold 1381.95 -8.25 -0.6 1381.28 1391.61 Silver 21.800 -0.240 -1.1 21.720 22.050 Platinum 1429.74 -15.26 -1.1 1435.50 1452.25 Palladium 712.47 -17.03 -2.3 716.00 730.04 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 65,190 216,692 181,429 20.98 -0.13 US Silver 40,924 54,359 56,475 30.05 -2.23 US Platinum 13,607 12,505 11,703 22.59 0.31 US Palladium 3,714 6,357 5,583
(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Anthony Barker, Bob Burgdorfer and Jim Marshall)