PRECIOUS-Gold steady after sharp fall; physical buying aids

                                
 * Gold's retreat seen temporary
                                
 * Gold may fall to $1,360 - technicals [ID:nL3E7C500X]
                                
 * Coming up: U.S. ISM N-Mfg PMI, Dec; 1500 GMT

 (Updates prices; adds comment)	
                                
 By Rujun Shen	
                                
 SINGAPORE, Jan 5 (Reuters) - Spot gold steadied on 
Wednesday from a more than two percent fall in the previous 
session, as bargain hunting on the physical market lent 
support and helped offset a stronger dollar.	
    Spot gold gained 0.3 percent to $1,383.16 
an ounce by 0651 GMT, after posting its biggest daily loss 
since Nov 12. on Tuesday. U.S. gold rose by 0.3 percent 
to $1,383.1.	
                                
 Physical demand has taken advantage of the price dip, 
dealers said.	
                                
 "Physical buying is coming in. A lot of jewellers are very 
happy. We are getting a lot of buying from them in India and 
Thailand," said a Singapore-based dealer.	
                                
 A new bearish target at $1,360 per ounce has been 
established for spot gold as the deep fall in the 
previous session only completed part of a big downtrend, 
according to Wang Tao, a Reuters market analyst. [ID:nL3E7C500X]	
                                
 For a 24-hour gold technical outlook:  	
                                
 http://graphics.thomsonreuters.com/WT/20110501084423.jpg	
                                
 "It's still a healthy correction," said a Hong Kong-based 
dealer. "Gold will probably test $1,375, then $1,350, in the 
coming two days, until Friday's non-farm payrolls data give a 
good hint on dollar's next move."	
                                
 The dollar held firm on Wednesday, bolstered by further 
evidence that the U.S. economic recovery is becoming 
self-sustaining, while a correction in high-flying commodity 
prices pressured the Australian dollar. 
                                
 Holdings in the world's largest gold-backed 
exchange-traded fund, SPDR Gold Trust , fell to a 
seven-month low at 1,276.472 tonnes by Jan 4. 
                                
 An improved economic outlook following a bout of positive 
data from the United States and elsewhere in recent weeks 
helped trim safe-haven demand, which usually boosts gold 
prices. 	
                                
 The CBOE Volatility Index, or VIX , fell slightly to 
17.38 on Tuesday, showing that risk appetite was not deterred 
by the broad sell-off in commodities. 
                                
 The price dip, however, did not change the bullish outlook 
for the bullion on the longer term, analysts said.	
                                
 "It's a temporary setback," said Yingxi Yu, an analyst at 
Barclays Capital.	
                                
 "We do see some physical buying come in to support. At 
this stage, I don't think we are into something more 
significant and sustained, and we still remain relatively 
positive on gold for this year."	
                                
 Federal Reserve officials in December felt the U.S. 
economic recovery was still weak enough to warrant monetary 
support despite growing signs of strength, Fed meeting minutes 
released on Tuesday showed. [ID:nWAL4CE7W1]	
                                
 The weak stock markets and base metals performance 
dampened the sentiment on the platinum group metals.	
                                
 Spot platinum fell to a 1-1/2 week low of $1,723.5, 
and recovered to $1,733.45.	
                                
 Spot palladium fell 0.7 percent to $769.9.	
                                
 Three-month copper on the London Metal Exchange 
slipped from a record high on Tuesday.  	
	
 Precious metals prices 0651 GMT                                         
  Metal             Last    Change  Pct chg  YTD pct chg  Turnover       
  Spot Gold        1383.16    3.43   +0.25     -2.56                     
  Spot Silver        29.60   -0.17   -0.57     -4.08                     
  Spot Platinum    1733.45  -19.79   -1.13     -1.93                     
  Spot Palladium    769.90   -5.07   -0.65     -3.70                     
  TOCOM Gold       3665.00  -87.00   -2.32     -1.72        95335        
  TOCOM Platinum   4648.00  -84.00   -1.78     -1.02        21305        
  TOCOM Silver       78.40   -3.20   -3.92     -3.21         2768        
  TOCOM Palladium  2058.00  -44.00   -2.09     -1.86          589        
  Euro/Dollar       1.3281                                               
  Dollar/Yen         82.03                                               
  TOCOM prices in yen per gram. Spot prices in $ per ounce.              
 	
	
 (Editing by Himani Sarkar)	
 
  
                                
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