* Investor sentiment softens as safe-haven demand declines
* Sterling-priced gold bucks trend to climb 1 pct
* SPDR gold ETF sees biggest 1-day drop in over three months
* Reuters poll shows gold prices expected to plateau in 2012
(Updates prices, adds comment, detail)
By Amanda Cooper and Jan Harvey
LONDON, Jan 25 (Reuters) - Gold fell to a near three-month
low on Tuesday, putting the metla on course for its worst
monthly performance in 13 months as safe-haven demand evaporated
and investors booked further profits on the 2010 rally.
Spot gold <XAU=> fell as low as $1,322.70 an ounce and was
bid at $1.327.70 an ounce at 1409 GMT, against $1,334.25 late in
New York on Monday. U.S. gold futures for February delivery
<GCG1> fell $16.80 to $1,327.70.
Spot prices are on course for a 6.4 percent decline in
January, which would be the biggest monthly fall since a
7-percent drop in December 2009. Selling is largely a
consequence of a current run of positive economic data.
"(We forecast gold) to have a bad first quarter," said
Mitsubishi analyst Matthew Turner. "Economic data ended the year
quite strongly and I thought if it carried on strongly, interest
rate expectations would start to rise.
"But maybe the economic outlook isn't as rosy as people
think, and maybe we will see a recovery (in gold prices) from Q2
onwards," he said.
For the moment, strong consumer demand, particularly in
Asia, continues to provide a floor for spot gold prices, and a
significant decline in speculative holdings of gold futures has
taken some of the pressure off.
But investor sentiment towards gold has soured in the last
few sessions, as evidenced by the largest one-day outflow in
three months from the world's biggest exchange-traded gold fund.
Holdings in the SPDR Gold Trust <GLD> fell 10.926 tonnes to
1,260.843 tonnes on Jan 24. []
Adding to the case against gold was strong demand at the
euro zone rescue fund's first debt offer, which pushed the euro
to two-month highs. []
Usually the dollar's consequent weakness would benefit gold,
but the link between the two has weakened in the last year.
The European Financial Stability Facility (EFSF) launched
its first sale of bonds and market sources said demand, at 48
billion euros, dwarfed the 5 billion on offer. []
GOLD SEEN PLATEAUING
Longer term, ongoing jitters over growth and expectations
interest rates will stay low for now are buoying analysts'
expectations for gold, with a Reuters poll of 65 analysts on
Tuesday returning an average 2011 price view of $1,450 an ounce.
However, they see prices plateauing next year as economic
conditions normalise. []
"We expect gold prices to continue to climb in 2011 as the
resumption of quantitative easing should keep U.S. real interest
rates low," Goldman Sachs said in a report.
"However, with the current round of QE set to end in June
2011, and our U.S. economics team now forecasting strong U.S.
economic growth in 2011 and 2012, we expect U.S. real interest
rates to begin to rise into 2012, likely causing gold prices to
peak in 2012."
Sterling-priced gold bucked the trend, meanwhile, and was on
course to rise after nine consecutive sessions of losses as the
pound fell after poor UK GDP data diminished expectations that
British authorities would move towards higher interest rates.
Sterling gold <XAUGBP=R> was up 1 percent at 842.17 pounds
an ounce. Spot silver <XAG=> fell to $26.87 an ounce, down 0.2
percent, having earlier fallen to $26.54, its lowest in nearly
two months.
ETF flows have also undermined silver. Holdings of metal in
the iShares Silver Trust <SLV>, the world's largest silver ETF,
have fallen by 425.3 so far this month, worth about $364 million
at today's prices.
ETF Securities' London-listed silver product has seen an
outflow of well over 500,000 ounces in less than week. <PHPT.L>
Elsewhere platinum <XPT=> fell for a second day by 1.4
percent to $1,786.50 an ounce, while palladium <XPD=> fell 3.3
percent to $782.72, set for its biggest fall since mid-November.
(Editing by Keiron Henderson)
