RTRS:PRECIOUS-Gold drops on stronger equities, US retail sales data
* Strong retail sales lifts shares, dollar
* Gold drops further from 1-month high
* SPDR sees outflows of 3.56 tonnes
(Adds trader comments and updates prices)
By A. Ananthalakshmi
SINGAPORE, Jan 15 (Reuters) - Gold retreated for a second
session on Wednesday, moving further away from a one-month high,
as a rally in stock markets prompted by strong U.S. retail sales
data dented the metal's appeal as a safe haven.
The metal had been rising in the days before the retail
sales data as a disappointing jobs report last week stoked
speculation the U.S. Federal Reserve could slow the pace of its
stimulus tapering.
Spot gold eased 0.3 percent to $1,241.46 an ounce by
0348 GMT. It touched a one-month peak of $1,255 early on Tuesday
before ending the day 0.7 percent lower.
"Gold is very sensitive to U.S. economic data as that
directly affects the outlook for tapering," said one precious
metals trader in Hong Kong.
"The retail sales report was good but the next big thing is
going to be the Fed meeting later this month."
The Fed holds its next policy meeting on Jan. 28-29.
U.S. retail sales edged up in December with a core spending
gauge posting a big jump, a sign the economy gathered steam at
the end of last year and was poised for stronger growth in 2014.
Asian shares made guarded gains on Wednesday, following the
data, while Wall Street and the dollar rose.
The Fed announced its first cut to the $85 billion in
monthly bond purchases in December, citing an improving economy.
Markets are now closely watching economic data to gauge the pace
of the bank's cuts.
Two Fed officials on Tuesday said the U.S. central bank
should bring its bond-buying program to a swift close, with one
vowing to use his vote to support cuts to the program even if
stocks tumble.
Despite the recent price gains, investor sentiment continued
to be bearish as seen in outflows from SPDR Gold Trust.
The world's largest gold-backed exchange-traded fund said its
holdings fell 3.56 tonnes to 789.56 tonnes on Tuesday -- a fresh
five year low.
In the physical markets, premiums on the Shanghai Gold
Exchange for 99.99 percent purity gold remained steady at about
$13 an ounce.
Traded volumes hit a one-week high on Tuesday.
