* Positive manufacturing data helps outweigh Egypt fears
* Recovering risk appetite, falling investment weigh on gold
* Largest gold, silver ETFs see historic outflows in January
(Updates prices, adds comment)
By Jan Harvey
LONDON, Feb 1 (Reuters) - Gold prices fell back below $1,330 an ounce on
Tuesday after data showing the U.S. manufacturing sector expanded in January
lifted the dollar and boosted appetite for higher-risk assets at gold's expense.
The dollar's recovery outweighed support lent by geopolitical tensions in
Egypt, which had helped gold recover from three-month lows hit last week.
Spot gold <XAU=> fell as low as $1,325.40 an ounce and was bid at $1,327.30
an ounce at 1525 GMT, against $1,331.90 late in New York on Monday. U.S. gold
futures for April delivery <GCJ1> fell $5.60 an ounce to $1,328.90.
"In general the market wouldn't like to be short because it is afraid of the
geopolitical risks we are seeing at the moment," said Deutsche Bank senior
trader Michael Blumenroth.
"On the other hand, there are not so many incentives to be long at the
moment because the big hedge funds are putting money away from the gold market
into riskier markets at the moment."
Gold posted its biggest monthly drop in January since Dec. 2009 as investor
risk appetite improved, diverting interest from so-called havens such as gold
into higher-yielding assets.
The largest gold exchange-traded fund, the SPDR Gold Trust <GLD>, saw its
second-largest monthly outflow ever in January. The iShares Silver Trust <SLV>,
the main silver ETF, said its holdings fell by the most ever in a single month.
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"Right now confidence is coming back into the market and safe havens are not
so much in demand," said Commerzbank analyst Eugen Weinberg.
The latest well-received manufacturing data helped lift the dollar index
<.DXY> from earlier 2-1/2 month lows, while U.S. stocks also held gains. []
[] []
These factors outweighed concerns over ongoing unrest in Egypt, which
earlier lifted gold as high as $1,341.18.
Hundreds of thousands of Egyptians, from students and doctors to the jobless
poor, swamped Cairo on Tuesday in the biggest demonstration so far in an
uprising against an increasingly isolated President Hosni Mubarak.
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BAR PREMIUMS RISE IN TOKYO
Asian physical gold demand lent some support to gold prices, although this
is tailing off as China's Lunar New Year holiday celebrations get underway.
Premiums for gold bars soared to their highest in more than two years in
Tokyo on Tuesday and could rise further as steady shipments to other bullion
trading centres in Asia led to a tight supply, dealers said on Tuesday.
[]
Gold imports in India, the world's largest consumer of the yellow metal,
rose 18 percent in January to 40 tonnes provisionally, higher than a Reuters
forecast, the head of the Bombay Bullion Association told Reuters.
[]
Among other commodities, oil prices edged a touch lower after hefty gains in
the previous session that took Brent crude past the $100-a-barrel mark. []
Higher oil prices could weigh on platinum group metals prices if they affect
car sales, UBS said in a note. Automakers are the main buyers of platinum and
palladium.
"The potential impact of dear oil was noted consistently by dealers, who
fear that higher prices at the pump could hamper the fragile auto market
recovery," UBS analyst Edel Tully wrote.
Carmakers are making a strong start to 2011, soothing concerns about slower
demand growth in Asia and a bumpy recovery in western markets. []
Platinum <XPT=> was at $1,800 an ounce against $1,791.50, while palladium
<XPD=> was at $813.93 against $811.97. Silver <XAG=> was bid at $27.98 an ounce
against $28.04.
(Reporting by Jan Harvey; Editing by Jason Neely)
