September 11, 2013 / 10:19 AM / 4 years ago

PRECIOUS-Gold slips as Syria worries ease, Fed in focus

* Gold's safe-haven support falls as Syria fears ebb
    * More losses possible if Fed announces stimulus tapering
    * Traders buy short-term, cheap options as insurance
    * Coming up: US import, export prices; jobless claims Thurs

 (Adds analyst comment, second byline, dateline, updates market
activity)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Sept 11 (Reuters) - Gold was lower near
midday on Wednesday, after hitting a three-week low early,
pressured by an easing of tensions with Syria and by worries the
U.S. Federal Reserve may scale back its monetary stimulus.
    Bullion's traditional safe-haven appeal against political
turmoil decreased after Syria accepted a Russian proposal on
Tuesday to give up chemical weapons and U.S. President Barack
Obama in a televised address asked the Congress to postpone a
vote authorizing military actions. 
    Analysts said that the crude oil market appears vulnerable
to more losses in the near term due to decreasing geopolitical
tensions, which may drag other commodities lower.
    "Although gold may decline in sympathy as well, we think it
is in store for a much larger break once the Fed announces its
tapering decision next week," said Edward Meir, metals analyst
at futures brokerage INTL FCStone.
    While consensus is building among analysts that the Fed
could begin to slash its $85 billion monthly bond purchases as
early as September, disappointing U.S. nonfarm payrolls data
last week could complicate an otherwise rosy economic outlook.
    The U.S. central bank's Federal Open Market Committee is set
to release a policy statement at the end of its two-day meeting
next Wednesday.
    Spot gold inched down 30 cents to $1,363.29 by 1:40
p.m. EDT (1740 GMT), having earlier fell to its lowest since
Aug. 22 at $1,356.85 an ounce.
    U.S. gold futures for December delivery settled down
20 cents an ounce at $1,363.80.
    Carlos Perez-Santalla at futures brokerage Marex Spectron
said that a few bullion dealers are expecting a wave of selling
when the Fed bond-buying reduction is announced, which will
likely create a buying opportunity. 
    The Fed's stimulus has been a driver in gold's rally in
recent years, with the increased financial liquidity and
record-low interest rates encouraging investors to put money
into non-interest-bearing assets.
    In the gold options market, traders are stepping up buying
cheaper, shorter-term bearish option bets, expecting bullion
prices could fall further due to lower risk related to Syria and
the expected Fed tapering. 
    Market participants have bought nearly 5,000 contracts of
Comex October put options <0#GCc1++> in the last six sessions
since Tuesday, between the strike price of $1,300 and $1,350 an
ounce, CME Group data showed.
    Among other precious metals, silver, which fell to a
three-week low of $22.75 an ounce earlier, rebounded 0.8 percent
to $23.12. 
    Platinum rose 0.1 percent to $1,469.49 an ounce,
while palladium dropped 0.4 percent to $688.47 an ounce.
 1:40 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1363.80  -0.20   0.0  1356.00 1368.70   89,855
 US Silver DEC  23.172  0.156   0.7   22.785  23.250   29,558
 US Plat OCT   1473.50  -0.60   0.0  1468.10 1487.40    9,763
 US Pall DEC    691.20  -1.45  -0.2   688.00  704.00    3,213
                                                               
 Gold          1363.29  -0.30   0.0  1357.65 1367.90         
 Silver         23.120  0.180   0.8   22.750  23.200
 Platinum      1469.49   1.89   0.1  1471.00 1483.50
 Palladium      688.47  -3.04  -0.4   690.00  700.50
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold         96,668   161,456   182,106     22.34   -0.22
 US Silver       31,150    67,776    58,235     35.94    1.11
 US Platinum     13,141    10,195    12,279     21.14    0.00
 US Palladium     3,242     6,785     5,844                  
                                                               
 
 (Additional reporting by Giulia Slater in London; Editing by
William Hardy and Bob Burgdorfer)

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