* Dollar recovers as market awaits details of possible QE
* Biggest gold ETF sees further outflow in New York
* Coming up: Minutes of FOMC meeting, 1800 GMT
(Updates with comment, refreshes prices)
By Amanda Cooper and Jan Harvey
LONDON, Oct 12 (Reuters) - Gold fell on Tuesday as the U.S.
dollar rebounded and uncertainty prevailed over what the Federal
Reserve will do to support growth, while Goldman Sachs said
falling U.S. rates prompted it to lift its gold price forecast.
Spot gold <XAU=> was bid at $1,346.95 an ounce at 1520 GMT,
against $1,352.95 late in New York on Monday. U.S. gold futures
for December delivery <GCZ0> fell $6.40 an ounce to $1,348.00.
Prices rallied to a record $1,364.60 an ounce last week as
expectations the Federal Reserve would move towards further
quantitative easing to bolster the flagging U.S. economy
undermined the dollar.
Many analysts expect to see some pullback in the gold price
before the uptrend resumes. Investment bank Goldman Sachs said a
period of slowing U.S. growth coupled with a fresh round of
quantitative easing had prompted it to raise its 12-month gold
forecast to $1,650 an ounce, from around $1,365 previously.
"Underpinning (gold) is a belief in this market that nothing
is being fixed in the global economy. It's not all over, it's
not all fabulous and great, there are real fears of recession,
of dollar weakness," said Peter Hillyard, director of commodity
sales at ANZ.
"In other words, we get respite from these things and a
sense of calm ... and gold is reacting to that," he said.
The dollar rose to a one-week high against the euro <EUR=> on
Tuesday, extending the previous session's gains as investors
worried the U.S. currency had fallen too abruptly. []
The Fed releases the minutes of its most recent policy
meeting at 1800 GMT and analysts expect to see some indication
from the central bank about the likelihood of, and scope for,
renewed quantitative easing measures.
Analysts said the currency market had already priced in
aggressive U.S. monetary easing and that if the Fed does not
press ahead with such a policy at its Nov. 21 meeting, the
dollar is likely to rebound.
"Today's focus will be on the release of the latest Federal
Open Market Committee minutes for any further insight into the
central bank's thinking on further stimulus measures," said CMC
Markets analyst Michael Hewson in a note.
"But given that the U.S. dollar has declined 10 percent
against the euro since the September lows, one has to wonder how
much quantitative easing may already be priced in."
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Graphic on rise in global currency tensions:
http://graphics.thomsonreuters.com/F/10/GLB_CURMP1010.html
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ETF FLOWS SLOW
Investment interest in gold-backed exchange-traded funds was
soft, meanwhile, with holdings of the world's largest, New
York's SPDR Gold Trust <GLD>, declining by just under 1 tonne on
Monday to 1,287.327 tonnes. []
The trust's holdings have dropped nearly 7.5 tonnes so far
this month, despite a 2.6 percent rise in gold prices.
"It is remarkable that these outflows have not put that much
pressure on gold prices so far," said Commerzbank in a note.
"Physical buying interest in Asia ahead of the major religious
festivals is apparently forming a counterweight."
Silver <XAG=> was bid at $23.16 an ounce against $23.29,
while platinum <XPT=> was at $1,689.00 an ounce against
$1,683.15.
Palladium <XPD=> was virtually flat on the day at $585.00
against $585.45 late on Monday.
However, it has still strongly outperformed platinum so far
this year as analysts predicted firmer fundamental support for
the autocatalyst metal later this year from a recovery in the
gasoline-consuming U.S. and Chinese car markets.
Gasoline engines bear a heavier loading of palladium than
platinum in their catalytic converters. Platinum is more exposed
to the more slowly recovering European market, where diesel
engines are more commonly used.
The platinum-palladium ratio -- the number of ounces of
palladium needed to buy an ounce of platinum -- fell to its
lowest since early 2004 this week at just under 2.9.
(Editing by Sue Thomas)
