* Gold hits 3-month low on euro weakness, global sell-off
* Bullion set to post biggest 1-day drop since December
* SPDR gold ETF reports fresh 1.6-tonne outflow
(Recasts, updates prices, market activity; adds second byline,
dateline, previously LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Feb 4 (Reuters) - Gold tumbled 4 percent
on Thursday, sliding below technical support levels and hitting
a three-month low at $1,060.50 an ounce, as investors who were
worried about the euro zone's fiscal woes bid up the dollar.
Gold was on track to post its biggest one-day percentage
loss since December, and other precious metals also fell.
Silver slid 6 percent to its lowest since September, platinum
dropped 4 percent and palladium fell more than 6 percent.
Scott Meyers, senior analyst at Pioneer Futures, a unit of
MF Global, said gold has slid below technical support levels.
"There is not a lot of technical support in gold right now.
It is more of a function of how the market reacts to whatever
stimulus is forcing the market lower right now," Meyers said.
Spot gold <XAU=> hit a low of $1,060.50 an ounce, the
weakest since Nov. 3. It was at $1,063.75 an ounce at 12:45
p.m. EST (1745 GMT), sharply lower than $1,108.85 late on
Wednesday.
U.S. gold futures for April delivery <GCJ0> fell $47, or
4.2 percent, to $1,065 on the COMEX division of the NYMEX.
VTB Capital analyst Andrey Kryuchenkov agreed that the
technical picture looked weak for gold after it failed to
sustain gains above $1,120 an ounce this week.
The euro plunged to a seven-month low against the dollar as
investors fretted about the fiscal health of some debt-laden
euro-zone countries.
European Central Bank President Jean-Claude Trichet
predicted many members in the bloc will have large, sharply
rising fiscal imbalances. []
Strength in the U.S. dollar makes dollar-priced commodities
more expensive for holders of other currencies.
Among other commodities, oil prices fell nearly $4 to about
$73 a barrel amid a global sell-off, as Reuters-Jefferies CRB
index <.CRB> also fell more than 2 percent.
A wave of economic pessimism swept through the world stock
markets on Thursday, pressuring gold and other commodities.
Wall Street fell about 2.5 percent on an unexpected
increase in the number of Americans claiming jobless benefits,
and as sovereign debt fears in Europe led investors to dump
riskier assets. []
TECHNICALLY VULNERABLE
The sharp decline sent spot gold well below its 14-, 50-
and 100-day moving averages. Technical analysts saw signs that
gold could fall further.
"The chart reveals a yawning chasm that could take prices
back to $1,010.... it may start slowly but gain momentum as it
comes lower," said Peter Hillyard, head of metal sales at ANZ
Banking Group.
The world's largest gold-backed exchange-traded fund, New
York's SPDR Gold Trust <GLD> on Wednesday reported its first
outflow this month. Its holdings declined 1.6 tonnes that day,
after falling 21.7 tonnes in January. []
In other precious metals, silver <XAG=> touched a low of
$15.33, lowest since September, tracking gold's losses, and was
last at $15.41 an ounce against $16.34. Platinum <XPT=> was at
$1,506 an ounce versus $1,572.50, and palladium <XPD=> at
$405.50 versus $434.50.
Prices at 1:16 p.m. EST (1816 GMT)
Last Change Pct 2009 YTD
Chg Close % Chg
US gold <GCG0> 1066.00 -45.40 -4.1 1096.20 -2.8
US silver <SIH0> 15.440 -0.877 -5.4 16.845 -8.3
US platinum <PLJ0> 1508.00 -68.20 -4.3 1471 2.5
US palladium <PAH0> 409.00 -27.80 -6.4 408.85 0.0
Gold <XAU=> 1064.50 -44.35 -4.0 1096.35 -2.9
Silver <XAG=> 15.41 -0.93 -5.7 16.84 -8.5
Platinum <XPT=> 1506.50 -66.00 -4.2 1465.50 2.8
Palladium <XPD=> 405.50 -29.00 -6.7 405.50 0.0
Gold Fix <XAUFIX=> 1083.25 -19.25 -1.7 1104 -1.9
Silver Fix <XAGFIX=> 16.13 -66.00 -3.9 16.99 -5.1
Platinum Fix <XPTFIX=> 1549.00 1.00 0.1 1466 5.7
Palladium Fix <XPDFIX=> 431.00 1.00 0.2 402 7.2
(Reporting by Frank Tang and Jan Harvey; Editing by David
Gregorio)
