(Updates prices)
By Lewa Pardomuan
SINGAPORE, Sept 15 (Reuters) - Gold slipped 1 percent in
volatile trade on Thursday after equities rose on optimism over
tentative steps by European policy makers to resolve and limit
the region's debt crisis.
Gold's failure to revisit recent highs also prompted
investors to trim positions and turn their attention to a series
of economic data from the United States ahead of next week's
meeting of the Federal Reserve's Federal Open Market Committee
(FOMC) on interest rates.
U.S. gold futures GCcv1 lost 1 percent to hit a low around
$1,806 an ounce, putting pressure on cash gold.
"We've seen in the last few days that gold has struggled to
make any headway," said Darren Heathcote, head of Investec
Australia in Sydney. "That is a sign of the market really
waiting for something more substantial, either coming out of
Europe or coming out of the United States."
Spot gold fell $12.01 to $1,808.09 an ounce by 0607
GMT, extending losses from the previous session. Bullion, which
has risen around 27 percent this year, was well below a lifetime
high around $1,920 an ounce struck last week.
Asian stocks bounced on Thursday after euro zone policy
makers stepped in to tackle a crippling debt crisis, but there
were also fears about obstacles the bloc's leaders face, which
could weigh on the euro and Asian currencies in the medium term.
Sentiments remained volatile as documents revealed that
European finance ministers have been warned confidentially of
the danger of a renewed credit crunch as a "systemic" crisis in
euro zone sovereign debt spills over to banks.
The uncertainties about global economic growth have driven
gold prices to scale record highs since July, and are still
expected to underpin sentiment for the metal until investors are
convinced the danger of recession is past.
Debt problems in the European Union are raising the risk to
a bullish outlook for commodities, Goldman Sachs economist
Allison Nathan said on Thursday, reiterating a 12-month forecast
for Brent LCOc1 at $130 per barrel, gold at $1,860 an ounce
and LME copper at $11,000 a tonne.
World Bank President Robert Zoellick said on Wednesday the
world had entered a new economic danger zone and Europe, Japan
and the United States all needed to make hard decisions to avoid
dragging down the global economy.
"I would say we'll be watching the U.S. CPI figures ahead of
the FOMC meeting next week. If we do see an acceleration in
inflation, then I think additional Fed action or looser monetary
policy will be more difficult to justify," said a dealer in
Singapore.
"I think gold will trade sideways this week. I am looking
for support at $1,800. Gold is becoming a different creature
because of the volatility. We never saw gold trading so volatile
until prices rallied above $1,900."
The Federal Reserve, facing rising global financial strains
and recession fears, is poised to increase downward pressure on
longer-term interest rates next week in a bid to speed up a
sputtering U.S. recovery.
Labor Department releases the August Consumer Price Index at
1230 GMT, with economists in a Reuters survey expecting a 0.2
percent rise compared with a 0.5 percent rise in July. Excluding
volatile food and energy items, CPI is seen up 0.2 percent, a
repeat of the July figure.
In the energy market, oil fell as rising fuel stocks and
falling demand in top consumer the United States reinforced
fears that crumbling economic growth and Europe's debt crisis
would dent energy use.
