PRECIOUS-Gold drops 1 pct in choppy trade; Fed minutes eyed
* US gold futures briefly paused on volatile drop
* Gold, platinum hit 1-month lows, silver 3-month low
* Weak investment demand weighs ahead of Fed minutes
* Coming up: Minutes of Fed's October meeting at 1900 GMT
NEW YORK/LONDON, Nov 20 (Reuters) - Gold fell around 1 percent on Wednesday, as unusually large trades in the New York futures market set the tone for lower prices ahead of the release of minutes of the Federal Reserve's last policy meeting later in the day. Sudden drop in price appeared to rattle bullion investors. Within a minute's time at 6:27 a.m. EST (1327 GMT), gold tumbled more than $11, or nearly 1 percent, to $1,258 an ounce, triggering two consecutive 10-second momentary pauses aiming to prevent cascading stop orders, CME Group said. The metal later pared some losses after a flurry of news headlines hit traders' screen, including St. Louis Fed President's comments about possible December tapering, and a Bloomberg report that the European Central Bank is considering negative deposit rates. Gold's ability to hold above a key technical support of one-month low near $1,251 also boosted buying. "Any time gold approaches a major support such as the $1,250 area, it is likely to get a bounce because of short covering," said Thomas Capalbo, a precious metals broker at New York futures brokerage Newedge. "The choppiness in gold is going to continue until we get a definitive answer about whether if the Fed is going to taper," said Capalbo. Spot gold was down 0.9 percent at $1,262.71 an ounce low of $1,255.84. U.S. gold futures for December delivery were down $11.50 an ounce at $1,262 an ounce, with trading volume already surpassed its 30-day average at 145,000 lots, preliminary Reuters data showed. In a speech that echoed comments by his nominated successor, Janet Yellen, Fed chairman Ben Bernanke said while the economy had made significant progress, it was still far from where officials wanted it to be.
DEMAND LANGUISHES, SUPPLY UP Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded, fell 1.5 tonnes to 863.01 tonnes on Tuesday - their lowest since February 2009. On the supply side, output from the world's gold mines is set to hit record highs this year. Silver was down 0.3 percent at $20.25 an ounce, having earlier touched a three-month low of $20.08. Platinum fell 0.7 percent to $1,401.49 an ounce, having earlier hit a one-month low at $1,392.90, while palladium dropped 0.5 percent to $714.57 an ounce. Prices at 11:24 a.m. EST (1624 GMT)
LAST NET PCT YTD CHG CHG CHG US gold 1262.00 -11.50 -0.9% -24.7% US silver 20.235 -0.001 -0.5% -33.1% US platinum 1404.80 -15.10 -1.1% -8.7% US palladium 716.65 -5.25 -0.7% 1.9% Gold 1262.71 -11.93 -0.9% -24.6% Silver 20.25 -0.07 -0.3% -33.2% Platinum 1401.49 -10.31 -0.7% -8.8% Palladium 714.57 -3.43 -0.5% 1.8% Gold Fix 1257.00 -14.50 -1.1% -24.5% Silver Fix 20.24 -20.00 -1.0% -32.4% Platinum Fix 1404.00 6.00 0.4% -7.8% Palladium Fix 715.00 3.00 0.4% 2.3%