* SPDR gold ETF records biggest ever one-day outflow
* Short-term tech picture negative, though key levels hold
* Consumer buying surfaces, albeit modestly
* Coming up: FOMC policy decision, 1915 GMT
(Updates prices)
By Amanda Cooper
LONDON, Jan 26 (Reuters) - Gold fell for a fifth day on
Wednesday ahead of a U.S. Federal Reserve policy decision, while
a record outflow from the largest exchange-traded bullion fund
kept prices near Tuesday's three-month low.
The SPDR Gold Trust, the world's biggest gold-backed ETF had
its largest one-day outflow on record on Tuesday, reflecting a
decline in investor interest. []
Barclays Capital said outflows from a range of gold ETFs had
brought overall holdings to their lowest in five months.
Spot gold <XAU=> was bid at $1,325.55 an ounce at 1617 GMT,
against $1,332.75 late in New York on Tuesday. U.S. gold futures
for February delivery <GCG1> fell $7.4 to $1,325.6 an ounce.
When the Federal Reserve releases its decision on U.S.
monetary policy, investors are not expecting the central bank to
unveil any change in the benchmark interest rate, but they will
seek confirmation from the bank that its focus remains on
supporting growth. []
"Gold hasn't adjusted to a world in which interest rate
rises are conceivable particularly well, and some investors seem
to think enough is enough," said Mitsubishi analyst Matthew
Turner.
"We could see further weakness, particularly if the economic
data continues to be strong worldwide. However, with major
problems remaining in the eurozone and U.S. economies, it is
doubtful this signals the end of the gold bull market."
This echoes the views of ETF Securities head of research
Nick Brooks, who told a journalists' conference call on
Wednesday that the ongoing fiscal problems of developed
economies, coupled with rising inflation around the globe, would
likely feed demand for gold.
"Ultimately, the demand for gold will remain firm and will
come back but we're going through a period where there is a lot
of profit taking coming through," he said.
MONTHLY DECLINE
Gold has fallen for five days in a row now, bringing the
losses for January to more than 6 percent, which would be its
worst monthly performance since December 2009.
Traders have reported some consumer demand in gold since the
price hit its lowest since late October, although this has been
modest so far.
"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. []
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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.
Spot platinum <XPT=> was bid at $1,786.24 an ounce against
$1,784.50, while palladium <XPD=> was at $791.47 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."
In the medium term, platinum may be set to outshine gold,
with the white metal's bull trend conditions remaining intact,
analysts said. []
Silver <XAG=> was bid at $26.72 an ounce against $26.84.
(Additional reporting by Jan Harvey; Editing by Sue Thomas)
