* Rally in U.S. stocks lessens safe-haven demand in gold
* Investment demand slows, technical selling seen
* SPDR gold ETF holdings unchanged, Indian volume low
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, April 16 (Reuters) - Gold prices fell to a
one-week low on Thursday as higher U.S. equities dampened
safe-haven demand, and the bullion market showed signs of a
slowdown in investment demand and technical selling.
Sluggish physical buying was also providing little support
to prices, analysts said.
Spot gold <XAU=> traded at $872.65 an ounce at 3:04 p.m.
EDT (1904 GMT), down 2.0 percent from its late Wednesday quote
of $890.60 in New York. It hit a session low of $871.75, which
marked the lowest price since April 7.
U.S. gold futures for June delivery <GCM9> settled down
$13.70, or 1.5 percent, at $879.80 an ounce on the COMEX
Division of the New York Mercantile Exchange.
"Overall it will come lower. It's just a question of when
rather than if," said Simon Weeks, director of precious metals
at the Bank of Nova Scotia. "The safe-haven demand side has
fallen off dramatically for the time being."
"There is no big flow of money coming from an investment
point of view," he added. Investment demand had buoyed gold to
above $1,000 an ounce in late February, but bullion has since
lost more than 12 percent.
The world's largest gold-backed exchange-traded fund, New
York's SPDR Gold Trust <GLD>, has recorded no fresh inflows in
nearly a week. []
The trust's holdings have risen less than quarter of a
tonne so far in April, compared with nearly 40 tonnes in the
comparable period last month.
U.S. stocks rose after key banks posted surprisingly strong
results, dampening flight-to-quality buying in the gold
market.
"The market seems to be suffering from longs getting out as
equity markets offer better returns and gold is less sought
after as a safe haven," said Citi analyst David Thurtell.
The precious metal has traded in a narrow $20 range so far
this week as the market is pulled between conflicting signals
on inflation and the outlook for the stock and currency
markets.
On the currency markets, the dollar was broadly firmer as
hopes for a speedy economic recovery receded, pushing investors
toward what are seen as safer assets. []
A stronger dollar usually weighs on gold, which is often
bought as an alternative investment to the U.S. currency.
VOLUME LOW DESPITE INDIA BUYING
Indian jewelry sales continued to pick up on Thursday ahead
of the key Hindu festival of Akshaya Tritya, an auspicious day
for gold buying, but trading volumes were not huge, jewelers
said. []
Jewelry demand in India has slumped in the past year as
prices have risen. Traders say buyers are awaiting further
price declines before making purchases.
Among other precious metals, spot platinum <XPT=> was at
$1,205.50 an ounce, down 0.9 percent from its late Wednesday
quote of $1,216.50, while spot palladium <XPD=> was at $231.00
an ounce, down 1.5 percent from its previous finish of
$234.50.
Platinum has steadied since hitting a 6-1/2 month high on
Monday, when expectations the downturn in the global car
industry may be easing boosted buying of the metal used in
autocatalysts.
Rhodium <RHOD-LON> climbed $50 an ounce, or 4 percent, to
$1,300 an ounce, its highest level since early December,
building on the previous session's 9 percent gains.
The metal is benefiting from rising platinum prices and
hopes for better car demand.
Silver <XAG=> was at $12.18 an ounce, down 4.5 percent from
its previous finish of $12.75, after hitting a session low of
$12.14 -- the cheapest price since April 9. Traders said it was
tracking gold prices lower.
(With additional reporting by Michael Taylor; editing by Jim
Marshall)
