* Bullion falls below $950/oz as U.S. stocks turn higher
* More profit taking seen after trip to $1,000 last week
* S&P sees sovereign ratings downgrades outpacing upgrades
(Recasts, updates with quotes, closing prices, adds NEW YORK
dateline/byline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Feb 25 (Reuters) - Gold prices fell below
$950 an ounce on Wednesday, declining for a third straight day,
in choppy consolidation trade, and volatility will likely
remain high in the near term.
"The gold market had an unexpected correction this week,
which was contrary to the bullish fundamental scenario of gold,
and investors were unprepared for the break," said George
Nickas, commodities broker at FC Stone.
"With the week halfway over, the market is poised for
additional profit taking, rather than new fresh buying to
propel it through the $1,000 level," Nickas said.
Spot gold <XAU=> was at $949.10 an ounce at 3:14 p.m. EST
(2014 GMT), down 1.4 percent against its last quote of $962.45
in New York late on Tuesday. It had touched a session low of
$945.95 an ounce.
U.S. gold futures for April delivery <GCJ9> settled down
$3.30 at $966.20 an ounce on the COMEX division of the New York
Mercantile Exchange.
Positive comments from Federal Reserve Chairman Ben
Bernanke on Tuesday, coupled with gold's failure to
definitively move above $1,000 an ounce, had weighed on prices
early in the session, Quantitative Commodity Research
consultant Peter Fertig said.
U.S. stocks turned positive late on Wednesday after
financial shares reversed earlier losses on optimism about the
banking system. []
The dollar firmed against the euro as investors remained
averse to risk. []
Gold typically trends in the opposite direction to the U.S.
currency, and is often bought as an alternative asset.
However, the two have moved in line in recent weeks as both
have benefited from a flight to safety among investors. Gold
benefits when risk aversion is high as it is seen as a safe
store of value for investors.
GOLD'S RALLY CAPPED?
Some traders said that gold's gains may be capped by fears
the precious metal's rally to 11-month highs above $1,000 an
ounce last week was overdone.
Holdings of the world's largest gold exchange-traded fund,
the SPDR Gold Trust <GLD>, were 1,028.98 tonnes for a fourth
consecutive session on Tuesday, fueling speculation that
burgeoning demand for gold to back ETFs may have stalled.
"There is no demand for gold, other than investment demand
into ETFs and into small bars and coins," Commerzbank analyst
Eugen Weinberg said.
Gold buying in India picked up, however, as prices have
retreated from record highs last week. []
Spot silver <XAG=> was at $13.70 an ounce, down 0.3 percent
from its Tuesday finish of $13.74. Holdings of the largest
silver-backed ETF, the iShares Silver Trust <SLV>, were also
static on Tuesday, albeit at record levels.
Platinum <XPT=> was at $1,038.00 an ounce, down 0.2 percent
from its previous close of $1,040.50, while palladium <XPD=>
was at $196.50, down 0.8 percent from its late Tuesday New York
quote of $198.
(Additional reporting by Pratima Desai and James Macharia;
Editing by Walter Bagley)
