PRECIOUS-Gold eases from 1-month high on global growth prospects

A. Ananthalakshmi
Wednesday, 15 Jan 2014 | 3:14 AM ET

* Strong retail sales, World Bank forecasts lift shares

* Gold drops further from 1-month high

* SPDR sees outflows of 3.56 tonnes

(Adds World Bank forecast, updates prices) SINGAPORE, Jan 15 (Reuters) - Gold retreated for a second session on Wednesday, dropping back from a one-month high, as strong U.S. retail sales and global economic growth prospects prompted a rally in stock markets and dented the metal's appeal as a safe haven. The metal had been rising in the days before the retail sales data as a disappointing jobs report last week stoked speculation the U.S. Federal Reserve could slow the pace of its stimulus tapering. The World Bank on Tuesday also raised its forecast for global growth for the first time in three years as advanced economies started to pick up pace, led by the United States.

Spot gold eased 0.3 percent to $1,241.25 an ounce by 0751 GMT. It touched a one-month peak of $1,255 early on Tuesday before ending the day 0.7 percent lower. "Gold is very sensitive to U.S. economic data as that directly affects the outlook for tapering," said one precious metals trader in Hong Kong. "The retail sales report was good but the next big thing is going to be the Fed meeting later this month." The Fed holds its next policy meeting on Jan. 28-29. Asian share markets were mostly higher on Wednesday on the upgraded World Bank outlook for the global economy and the dollar's gains after the surprising strength in U.S. consumer spending. The Fed announced its first cut to the $85 billion in monthly bond purchases in December, citing an improving economy. Markets are now closely watching economic data to gauge whether the bank will deepen the cuts. Two Fed officials on Tuesday said the U.S. central bank should bring its bond-buying program to a swift close, with one vowing to use his vote to support cuts to the program even if stocks tumble. Despite the recent price gains, investors continued to sell down the SPDR Gold Trust. The world's largest gold-backed exchange-traded fund said its holdings fell 3.56 tonnes to 789.56 tonnes on Tuesday -- a fresh five year low. In the physical markets, premiums on the Shanghai Gold Exchange for 99.99 percent purity gold remained largely steady at about $13 an ounce. China has granted licences to import gold to two foreign banks for the first time, sources told Reuters, as moves to open the world's biggest physical bullion market gather pace.


Metal Last Change Pct chg Spot gold 1241.25 -3.46 -0.28 Spot silver 20.11 -0.1 -0.49 Spot platinum 1419.74 -6.51 -0.46 Spot palladium 733.25 -0.15 -0.02 Comex gold 1240.6 -4.8 -0.39 Comex silver 20.125 -0.15 -0.77 Euro 1.3641 DXY 80.824

COMEX gold and silver contracts show the most active months

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin and Tom Hogue)