* Asian buyers take advantage of price drop to buy
* SPDR gold ETF records biggest ever one-day outflow
* Short-term tech picture negative, though key levels hold
(Updates prices)
By Jan Harvey
LONDON, Jan 26 (Reuters) - Gold steadied on Monday ahead of
a U.S. Federal Reserve announcement on monetary policy later in
the day, with waning interest in the metal as a haven from risk
keeping prices near the previous session's three-month low.
The main gold exchange-traded fund, the SPDR Gold Trust,
recorded its biggest ever one-day outflow on Tuesday. []
Spot gold <XAU=> was bid at $1,331.60 an ounce at 1302 GMT,
against $1,332.75 late in New York on Tuesday. U.S. gold futures
for February delivery <GCG1> fell $1.20 to $1,331.10 an ounce.
The precious metal is taking some support from physical
demand after its slide to its lowest since Oct. 28, but buying
interest remains lacklustre.
"It looks like we have had a clearout and the correction has
brought back some buyers," said Saxo Bank senior manager Ole
Hansen. "Interesting that the sell-off has happened during a
time when inflation has been picking up and the dollar has been
weakening." Both factors are usually supportive of gold.
"The switch towards cyclicals has played its role, with
global growth projections being revised higher."
Hopes that the economic recovery is on track have benefited
other assets, like stocks. European shares climbed on Wednesday
after U.S. President Barack Obama proposed to cut corporate tax
rates. Analysts said Obama's State of the Union address had
diminished chances of a double-dip recession. []
Industrial commodities also rose, with oil climbing towards
$87 a barrel and copper up more than 1 percent. [] []
"We expect gold and silver to be particularly weak, with the
wider backdrop of improving macroeconomic demand supporting
industrial metals and reducing safe-haven buying," said Standard
Chartered in a weekly note.
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FED ANNOUNCEMENT EYED
The financial markets are now awaiting an announcement from
the U.S. Federal Reserve at the end of its two-day meeting on
monetary policy at around 1915 GMT. []
The Fed is likely to acknowledge an improving economic
outlook, analysts said, though it is expected to reaffirm a plan
to buy $600 billion in government debt to help speed recovery.
From a technical perspective, gold has entered a negative
pattern, though it remains above key support levels, according
to analysts who study charts of past price moves to determine
the future direction of trade.
"The fact that gold has slipped through the head and
shoulders' neckline at $1,360.04 and also the early January
$1,352.70 low is bearish and confirms a medium term top," said
Commerzbank in a weekly report.
"The first downside target is seen at $1,329.45/1,314.50.
This consists of the mid-November and late October lows and
should act as interim support, at least for a few days."
In the medium term, platinum may be set to outshine gold,
with the white metal's bull trend conditions remaining intact,
analysts said. []
Spot platinum <XPT=> was bid at $1,791.15 an ounce against
$1,784.50, while palladium <XPD=> was at $789.35 against
$778.72. Both are expected to rise this year and next as their
underlying fundamentals tighten. []
"On the supply side, palladium mine production has been
relatively subdued," said Bank of America Merrill Lynch analyst
Michael Widmer in a weekly report.
"Deliveries from Russian stockpiles have also subsided. This
is significant because the nation's de-stocking often switched a
structural deficit into an oversupplied market during the past
few years."
Silver <XAG=> was bid at $26.92 an ounce against $26.84.
(Editing by James Jukwey)
