* Gold steadies after hitting lowest since early November
* Physical buying emerges after prices fall below $1,700/oz
* Coming up: ECB rate decision, 1245 GMT
(Updates throughout, changes dateline, previous SINGAPORE)
By Jan Harvey
LONDON, Dec 6 Gold prices steadied above $1,690
an ounce on Thursday, as buyers took to the sidelines ahead of a
European Central Bank policy announcement, and on uncertainty
over negotiations to avert a U.S. fiscal crisis.
Confidence in gold has ebbed this month after it failed to
push above $1,730 in November. A weak technical picture helped
push prices to a one-month low on Wednesday, taking them below
their 100-day moving average for the first time since August.
Spot gold was at $1,693.00 an ounce at 1041 GMT,
little changed from $1,693.41 an ounce late on Wednesday, while
U.S. gold futures for December delivery were up 50 cents
an ounce at $1,694.30.
Buyers are awaiting direction from the ECB, non-farm
payrolls data on Friday, and next week's Federal Reserve policy
meeting, as well as clearer signals on how the United States
will deal with negotiations over its upcoming "fiscal cliff."
That refers to the possibility that a $600 billion package
of tax hikes and spending cuts due to kick in in the New Year
could push the world's biggest economy back into recession.
"We have the ECB decision today, with some (talk) of Spain
applying now for financial help, and furthermore we have the Fed
decision," LGT Capital analyst Bayram Dincer said. "Also, some
people are positioning for year-end, profit taking. All of this
is adding to negative sentiment in the gold market."
The ECB is likely to keep interest rates on hold on
Thursday, but may offer clues on its policy path for next year
with updated forecasts likely to present a grim outlook for the
euro zone economy in 2013.
The bank is wary of taking any action that could see the
euro zone's governments soft-pedal budget-consolidation efforts.
That puts the onus on Spain to ask for a full bailout before the
ECB can intervene and buy Spanish sovereign debt.
The euro slipped against the dollar on Thursday, with
investors wary of the single currency on expectations the ECB
may lower growth forecasts for the region.
"The focus will be on ECB staff forecasts," ING Bank said in
a note. "Currently the ECB sees 2013 GDP and CPI at 0.5 percent
and 1.9 percent respectively. Certainly the GDP forecast should
be cut close to zero."
On the wider financial markets, European shares climbed,
although some traders said they would still look to sell due to
uncertainty over U.S. budget talks, while the euro zone's
blue-chip Euro STOXX 50 equity index set a fresh 2012 high.
EURO-PRICED GOLD SLIPS
Gold priced in euros slipped into oversold territory after
falling nearly 2 percent this week, posting its biggest one-day
decline in six months on Wednesday and touching its lowest since
mid-July at 1,288.85 euros an ounce.
Its 14-day relative strength index stood at 28.9 on
Thursday, with any reading less than 30 considered to signal
Investors' appetite for physical gold and physically-backed
investment products remained sharp, with holdings of the largest
gold exchange-traded fund, New York's SPDR Gold Trust, at
a record high.
Demand in India, historically the world's biggest buyer of
gold, was also firm as prices fell to their lowest in a month,
weighed by a stronger rupee and a decline in spot prices.
"Buying is on, as people feel prices are good," Haresh
Acharya, head of the bullion desk at Gujarat-based Parker
Bullion, said. "Wedding demand is expected to continue for
another couple of months."
From a chart perspective, further losses in gold could take
prices down to support at its November low at $1,672.50 an
ounce, and its 200-day moving average at $1,660.
Among other precious metals, silver was down 0.15
percent at $32.79 an ounce.
Silver has lost some ground to gold so far this month, with
the gold/silver ratio, which measures the number of silver
ounces needed to buy an ounce of gold, edging further from last
week's near eight-month low at 50.42 to 51.6 on Thursday.
Spot platinum was up 0.1 percent at $1,577.24 an
ounce, while spot palladium was down 0.4 percent at
$679.60 an ounce.
(Editing by James Jukwey)