SINGAPORE – Gold slid more than 1% on Tuesday as declines in stock markets triggered by a growing nuclear crisis in Japan prompted speculators to sell bullion to cover losses, while holdings on the ETF fell to their lowest since May last year. Silver fell around 3%. Platinum and palladium gave up early gains and dropped more than 1% after Japanese shares slumped for a second day on Tuesday as two fresh explosions rocked a stricken nuclear plant. Gold lost $10,70 an ounce to $1 415,95 by 06:36 GMT, after rising as much as 1% on Monday as Japan battled to prevent a nuclear catastrophe following last week's devastating quake and tsunami and on political unrest across the Arab world. "It still looks like it's constructive. It's just consolidating. But if we get a large sell-off in equities, people will tend to sell gold," said Jonathan Barratt, managing director of Commodity Broking Services in Melbourne. "But if it's a major concern, then people will eventually go to gold as the last resort." Premiums for gold bars were steady at between $1,00 and $1,50 an ounce with spot London prices in Hong Kong and Singapore, with no signs of safe-haven buying related to last week's massive earthquake and tsunami in Japan and the subsequent nuclear crisis. Japan faces a recovery and reconstruction bill of at least $180-billion -- 3% of its annual economic output -- or more than 50% higher than the total cost of 1995's earthquake in Kobe. Japan warned that radioactive levels had become significantly higher around a quake-stricken nuclear power plant on Tuesday after explosions at two reactors, and the French embassy said a low level radioactive wind could reach Tokyo by the evening. "The price shot up to above $1 430 but it could not break through that level. I think that's why the market is down. Also, ETF holdings seem to be going down again," said a dealer in Singapore. "We can say people are selling gold to cover their margin call." US gold futures for April fell $8,6 to $1 416,3 an ounce. In the Middle East, the United States urged Saudi Arabia on Monday to show restraint after it sent troops to neighbouring Bahrain in a move some analysts said showed the limits of Washington's influence in the region. The deployment of 1 000 Saudi troops, at the request of Bahrain's Sunni royal family, came two days after US Defense Secretary Robert Gates visited the island kingdom and pressed its rulers to implement political reforms to defuse tensions with the Shi'ite Muslim majority. Rising tensions in North Africa and the Middle East helped bullion strike record around $1 444 last week. The yen surged on Tuesday after Japan's prime minister said radiation levels near a quake-hit nuclear plant had become high and the risk of further nuclear leakage was rising, prompting investors to dump risky assets. The Bank of Japan (BOJ) said on Monday it would increase the size of its asset purchase to 10-trillion yen ($122 billion) from 5 trillion yen and analysts think it may take more steps if the economic outlook deteriorates further. The BOJ is even more dovish than the US Federal Reserve, which has been cautious about seeking to exit its stimulus policy as it wants to bring down unemployment. US Federal Reserve policymakers meet on Tuesday and investors will closely watch the Fed's assessment on unemployment and the economy in general.

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