* Financial markets tread water ahead of Fed
* Largest gold ETF reports 3-tonne outflow
* Aquarius Platinum announces FY loss, blames falling prices
(Adds comment, updates prices)
By Jan Harvey
LONDON, Aug 12 (Reuters) - Gold prices held near $945 an
ounce in Europe on Wednesday as caution ahead of the Federal
Reserve announcement on monetary policy later in the session
kept investors on the sidelines.
Weakness in physical demand is also preventing prices from
rising, with the world's largest gold-backed exchange-traded
fund recording a further outflow on Tuesday.
Spot gold <XAU=> was bid at $944.70 an ounce at 1335 GMT,
against $944.55 an ounce late in New York on Tuesday. U.S. gold
futures for December delivery <GCZ9> on the COMEX division of
the New York Mercantile Exchange eased 10 cents to $947.50.
Investors are cautious ahead of the Federal Open Market
Committee's decision on rates and accompanying statement at 1815
GMT, analysts said.
"There could be increased volatility after the release of
the FOMC statement," said Peter Fertig, a consultant at
Quantitative Commodity Research.
"The Fed is likely to repeat Bernanke's assessment that the
economy is slowly recovering. On one hand, recovery would be a
factor indicating that investors might take more risk again,
which would be negative for dollar but positive for gold."
"But on the other, if he is emphasizing a slow recovery, in
that case the impact might be a little be dampened or even to
the opposite effect."
The dollar softened a touch against a basket of six major
currencies on Wednesday ahead of the decision, while oil hovered
below $70 a barrel as the market awaited U.S. inventory data and
the results of the Fed meeting. [] []
On other markets, European shares turned higher, reversing
early losses, as utility E.ON <EONGn.DE> released positive
earnings. U.S. stocks opened lower. []
SOFT DEMAND
Investment demand for physical gold remains soft, with the
world's largest bullion-backed exchange-traded fund, the SPDR
Gold Trust <GLD>, reporting a new outflow. Its holdings have
fallen more than seven tonnes in the last week. []
"With more investor redemptions expected after a further 3
tonnes of gold was cut from the SPDR ETF yesterday, gold will
remain at risk to further pressure," said TheBullionDesk.com
analyst James Moore.
But gold buying is picking up in the world's largest bullion
consumer, India, as jewellers take advantage of a price decline
to stock up during the festive season.
India celebrates the festivals of Raksha Bandhan,
Janmasthami and Ganesh Chaturthi in August. []
In supply news, gold producer Harmony Gold Mining <HARJ.J>
said a mineworker died after an accident at its Elandsrand mine
in South Africa on Friday. [] Production was
suspended and is likely to restart on Thursday, it said.
Aquarius Platinum <AQP.AX>, the world's number four producer
of the white metal, announced a full-year net loss of $45.7
million, blaming a slide in metals prices. Platinum fell 47
percent last year as the economic slowdown hit demand.
The company said its production of platinum group metals
fell 9 percent to 455,675 ounces in its last financial year.
[]
Platinum <XPT=> was at $1,229 an ounce against $1,237, while
palladium <XPD=> was at $266.50 against $271. Silver <XAG=> was
at $14.31 an ounce against $14.27.
(Additional reporting by Martina Fuchs; Editing by Sue Thomas)
