* Speculators sell gold to cover losses
* Coming Up: U.S. FOMC rate decision Jan; 1815 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, March 15 (Reuters) - Gold slipped half a percent
on Tuesday as declines in stock markets triggered by a deepening
nuclear crisis in Japan prompted speculators to sell bullion to
cover losses, while holdings on the ETF slipped to their lowest
since May last year.
Japanese stocks dropped 7 percent to a two-year low and
futures prices plunged as the country's prime minister said
radiation levels at a stricken nuclear plant had become high,
deepening concerns about the economic toll of the disaster.
Gold lost $6.95 an ounce to $1,419.70 an ounce by
0328 GMT, after rising as much as 1 percent on Monday as Japan
battled to prevent a nuclear catastrophe after last week's
devastating quake and tsunami and on political unrest across the
Arab World.
"It still looks like it's constructive. It's just
consolidating. But if we get a large sell-off in equities,
people will tend to sell gold," said Jonathan Barratt, managing
director of Commodity Broking Services in Melbourne.
"But if it's a major concern, then people will eventually go
to gold as the last resort."
Premiums for gold bars were steady at between $1 and $1.5
an ounce to the spot London prices in Hong Kong and Singapore,
with no signs of safe haven buying related to last week's
massive earthquake in Japan and the subsequent nuclear crisis.
Quake-hit Japan faces a recovery and reconstruction bill of
at least $180 billion, or 3 percent of its annual economic
output, or more than 50 percent higher than the total cost of
1995's earthquake in Kobe.
"The price shot up to above $1,430 but it could not break
through that level. I think that's why the market is down. Also,
ETF holdings seem to be going down again," said a dealer in
Singapore. "We can say people are selling gold to cover their
margin call."
U.S. gold futures for April fell $5 to $1,419.9 an
ounce.
In the Middle East, the United States urged Saudi Arabia on
Monday to show restraint after it sent troops to neighboring
Bahrain in a move some analysts said showed the limits of
Washington's influence in the region.
The deployment of 1,000 Saudi troops, at the request of
Bahrain's Sunni royal family, came two days after U.S. Defense
Secretary Robert Gates visited the island kingdom and pressed
its rulers to implement political reforms to defuse tensions
with the Shi'ite Muslim majority.
Rising tension in the North Africa and the Middle East
helped bullion struck record around $1,444 last week.
In other markets, the dollar briefly spiked against the yen
on Tuesday and stirred talk Japanese authorities may have
intervened to stem a rising yen, but traders later downplayed
the move as a one-off order that added to nervousness in the
market.
The Bank of Japan said on Monday it would increase the size
of its asset purchase to 10 trillion yen ($122 billion) from 5
trillion yen and analysts think it may take more steps if the
economic outlook deteriorates further.
The BOJ is even more dovish than the U.S. Federal Reserve,
which has been cautious about seeking to exit its stimulus
policy as it wants to bring down unemployment
U.S. Federal Reserve policymakers meet on Tuesday and
investors will closely watch the Fed's assessment on
unemployment and the economy in general.
Precious metals prices 0328 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1419.70 -6.95 -0.49 0.02
Spot Silver 35.71 -0.14 -0.39 15.72
Spot Platinum 1733.24 -16.75 -0.96 -1.94
Spot Palladium 733.22 -6.78 -0.92 -8.29
TOCOM Gold 3734.00 -37.00 -0.98 0.13 37057
TOCOM Platinum 4572.00 -66.00 -1.42 -2.64 20446
TOCOM Silver 92.30 0.10 +0.11 13.95 1218
TOCOM Palladium 1914.00 -70.00 -3.53 -8.73 543
Euro/Dollar 1.3959
Dollar/Yen 81.59
TOCOM prices in yen per gram. Spot prices in $ per ounce.
(Reporting by Lewa Pardomuan; Editing by Ed Lane)
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