* India Jan gold imports plunge more than 90 percent
* Gold Fields sees output rising 14 pct in Q3
(Updates throughout, changes dateline, pvs SINGAPORE)
By Jan Harvey
LONDON, Jan 29 (Reuters) - Gold prices slipped another 1
percent on Thursday, extending the losses of the two previous
sessions, as the firmer dollar curbed buying of the precious
metal as a currency hedge.
Waning interest in bullion as a haven from risk and a
resurgence of demand worries after a new fall in Indian gold
imports are also weighing on prices, dealers said.
Spot gold <XAU=> slid to $878.10/880.10 an ounce at 1021 GMT
from $885.60 in New York late on Wednesday. The precious metal
has fallen 4 percent this week from the more than three-month
high of $915.30 it hit on Monday.
"After a pretty impressive run last week we saw profit
taking when gold failed to break through $920 an ounce,"
Commerzbank senior trader Michael Kempinski said.
"After the rally in stock markets, people are thinking twice
about taking in more gold at these higher levels," he added.
Gold is also re-establishing its relationship with the
dollar and oil after dissociating from its two main external
drivers last week as risk aversion came to the fore, he said.
Asian stocks and the dollar climbed overnight as investors
took heart from U.S. Congress' headway on a $825 billion
stimulus package. []
U.S. President Barack Obama's plan cleared its first
Congressional hurdle, passing through the House of
Representatives, as the Federal Reserve eyed more extreme
measures to ease credit market strains. []
While European stocks slipped in early trade as falling
commodity prices dragged down miners, they have enjoyed a
three-day winning streak this week.
"The recent rise in risk aversion has triggered strong
inflows into the gold ETFs and a simultaneous increase in demand
for gold coins and small investment bars," UBS analyst John
Reade said in a note.
"To that end, the recent rally in banking shares and other
evidence of relief in some markets for risk assets has seen gold
drift a little off its recent highs."
IMPORTS PLUNGE
Weakness in gold demand from traditional centres of
jewellery buying such as India, the Middle East and China is
worrying traders, analysts said.
India's gold imports plunged by more than 90 percent to 1.2
tonnes in January, the Bombay Bullion Association said on
Thursday, due to high prices and ample stocks. []
Indian buyers are waiting for lower prices before investing
in gold, traders said.
"There are no phone calls or... customers at retail shops,"
said Daman Prakash, director of gold importer MNC Bullion in
Chennai. Indian scrap sales have also picked up. []
Demand for gold has been buoyed by investment in
bullion-backed products such as exchange-traded funds.
The world's largest gold ETF, the SPDR Gold Trust, saw
strong inflows last week that took it to record levels, but its
holdings have been steady for the last three sessions.
On the supply side, the world's number four gold miner, Gold
Fields <GFIJ.J>, said its output in the three months to December
rose four percent from the previous quarter, and predicted a
further 14 percent rise in the quarter to March. []
Interest in gold as a safe haven is still expected to boost
investment demand this year, keeping prices steady in the face
of a global downturn that is expected to pressure other
commodities. []
Among other precious metals, silver <XAG=> slipped to
$11.73/11.79 an ounce from $11.95.
Demand for silver ETFs has also been strong, with holdings
of the largest, New York's iShares Silver Trust <SLV.A>, up 10
percent or 660 tonnes since Jan 1.
Platinum eased to $951/959 an ounce from $953.50 and
palladium <XPD=> was at $188.50/192.50 an ounce from $188.
(Editing by Sue Thomas)
