PRECIOUS-Gold reverses losses to trade near 3-week high
* Gold up for fifth straight session
* China gold data, ETF inflows boost sentiment
* Coming up: U.S. retail sales for July at 1230 GMT
(Updates prices) SINGAPORE, Aug 13 (Reuters) - Gold reversed earlier losses on Tuesday, trading near three-week highs on hopes that physical buyers and investors would return to the market. The metal is up for a fifth straight day, gaining strength from a weaker dollar and a surprise rise in holdings of gold exchange-traded funds (ETFs). "The sentiment in gold has definitely improved recently," said Danny Laidler, head of ETF Securities' Australia and New Zealand business. "The massive redemptions we saw in April have reduced every month. Hopefully the large outflows have stopped." Spot gold had risen 0.2 percent to $1,338.16 an ounce also added to gains from the previous session. Gold rose nearly 2 percent the previous day on strong Chinese gold consumption and an inflow to SPDR Gold Trust, the world's biggest gold ETF on Friday. The fund's holdings on Monday were unchanged. The top eight gold ETFs tracked by Reuters have recorded outflows of about $26 billion so far this year, hurting gold prices. A reversal in the trend would aid a price recovery. China's gold consumption surged in the first six months of the year as sliding prices of the metal lured buyers, data showed on Monday, reinforcing expectations that the nation will overtake India as the world's top gold consumer this year.
Gold has fallen about 20 percent this year amid expectations the U.S. Federal Reserve will start to scale back its economic stimulus, which has supported gold's role as a hedge against inflation. "Gold prices have been supported lately despite continuing talk of the Fed cutting back on stimulus in September. The main reason being the strong physical market in China," said Phillip Futures analyst Joyce Liu. With key U.S. economic data due this week, the focus could shift back to the timing of any pull-back in the Fed's stimulus. However, some experts say even if the bank begins tapering this year the impact will be fairly limited. "The expectations of a QE tapering are already priced in," said ETF Securities' Laidler, referring to quantitative easing. "There will not be a massive downside when the tapering begins."
Precious metals prices 0714 GMT
Metal Last Change Pct chg YTD pct chg Volume Spot Gold 1338.16 2.37 +0.18 -20.09 Spot Silver 21.50 0.15 +0.70 -29.00 Spot Platinum 1498.24 5.24 +0.35 -2.39 Spot Palladium 736.22 0.22 +0.03 6.39 COMEX GOLD DEC3 1337.80 3.60 +0.27 -20.17 25526 COMEX SILVER SEP3 21.49 0.15 +0.71 -29.09 11866 Euro/Dollar 1.3300 Dollar/Yen 97.57
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and Joseph Radford)