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PRECIOUS-Gold flat; technical momentum, Fed hopes seen supporting

Frank Tang and Clara Denina
Wednesday, 12 Feb 2014 | 4:07 PM ET

* Bullion takes breather after three days of rallies

* Gold breaks above trend line with more gains seen

* SPDR Gold Trust ETF posts inflow again

* Coming up: U.S. retail sales, weekly jobless claims Thurs

(Adds comment, second byline, dateline, updates market activities) NEW YORK/LONDON, Feb 12 (Reuters) - Gold prices ended little changed on Wednesday on profit-taking after rising to a three-month high near $1,300 an ounce underpinned by technical buying and hopes that the Federal Reserve will continue its measured tapering of bond purchases. The bullion market took a breather after three consecutive days of sharp gains, after incoming Fed Chair Janet Yellen made it clear she would not make any abrupt changes to the U.S. central bank's commitment to gradually rein in monetary stimulus. The metal erased earlier gains as investors took profits after prices failed to extend gains above the $1,300 resistance, traders said. A possible bullish double-bottom technical pattern and a breach of the trend line connecting highs in late August and early November on gold's weekly chart triggered buying, said Rick Bensignor, head of trading strategy at Wells Fargo Securities in New York. (Click for graphic: http://link.reuters.com/qax76v) "There is a potential double bottom in place, and the near-term trend line has broken to the upside. Gold can probably rise to between $1,350 and $1,375 in the next several weeks" if it can breach $1,300, said Bensignor. Spot gold was up 0.2 percent to $1,293.55 by 2:58 p.m. EST (1958 GMT), after hitting a three-month high at $1,295.91. U.S. COMEX gold futures for April delivery settled up $5.20 at $1,295 an ounce, with trading volume about 30 percent below its 30-day moving average, preliminary Reuters data showed. Bullion's nearly 1.5 percent rally on Tuesday reversed its recent strong inverse link with equities, which have been pressured by economic uncertainties and emerging-market jitters. On Wednesday, the S&P 500 index eased 0.1 percent. Gold usually holds an inverse correlation with the direction of equities as risk appetite detracts interest from the metal, regarded as a safe haven. Gold has gained around 7 percent since the beginning of the year, propped up by concerns about emerging markets and about economic growth in China. It fell 28 percent in 2013, snapping a 12-year run of gains, as the Fed looked set to unwind its bond-buying stimulus, which had supported prices.

ETF INFLOWS Investors have been cautiously moving back into the precious metal as seen in flows into SPDR Gold Trust, the world's largest gold-backed exchange-traded fund. Holdings in the ETF rose 1.80 tonnes to 798.85 tonnes on Tuesday. The fund, which lost around 500 tonnes in 2013, has not recorded any outflows in three weeks. Physical buying from China, the world's top bullion consumer, where demand has been robust due to the Lunar New Year holiday, could ease after the recent rally in prices, analysts said. Among other precious metals, silver dropped 0.2 percent to $20.19 an ounce. Platinum was up 1.7 percent at $1,404 an ounce, while palladium gained 1.4 percent to $724.90 an ounce.

2:58 PM EST LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold APR 1295.00 5.20 0.4 1283.90 1296.40 100,296 US Silver MAR 20.341 0.188 0.9 20.080 20.390 57,699 US Plat APR 1407.30 19.50 1.4 1385.00 1408.80 8,730 US Pall MAR 729.05 12.70 1.8 716.50 729.90 4,716 Gold 1291.50 0.04 0.0 1284.30 1295.91 Silver 20.190 -0.040 -0.2 20.120 20.380 Platinum 1404.00 23.10 1.7 1388.25 1406.50 Palladium 724.90 10.00 1.4 720.25 729.00 TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 107,913 160,617 185,259 16.72 -0.39 US Silver 84,841 46,103 56,476 24.7 0.13 US Platinum 9,104 10,808 13,297 18.36 -1.01 US Palladium 5,736 5,238 5,598 17.93 0.07

(Additional reporting by A. Ananthalakshmi in Singapore; Editing by Keiron Henderson, David Evans and James Dalgleish)