* Gold pressured as dollar rises to 1-month high vs euro
* SPDR gold ETF sees biggest outflow since late October
* Fears subside as Wall St up on better GE, Citi results
(Recasts, updates with quotes, closing prices, adds NEW YORK
to dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, April 17 (Reuters) - Gold fell about 1
percent on Friday, extending the previous session's near 2
percent losses, as the dollar rose and stock markets improved,
denting the metal's appeal as an alternative investment.
The largest decline in the past six months in holdings of
SPDR Gold Trust <GLD>, the world's biggest gold exchange-traded
fund, may indicate that investor interest in the metal is
waning.
"The ETFs ran out of steam some time ago, so in my mind, it
was a question of when rather than if we would come lower,
especially as there appears to be a degree of optimism
surrounding economic recovery," said Simon Weeks, director of
precious metals at the Bank of Nova Scotia.
"There has been more liquidation today and although
traditional physical (demand) has picked up, it is not enough
to do anything other than smooth the impact of the selling,"
Weeks said.
Spot gold <XAU=> traded at $867.45 an ounce at 2:23 p.m.
EDT (1823 GMT), down 0.8 percent from its late Thursday quote
of $874.55 late in New York on Thursday.
U.S. gold futures for June delivery <GCM9> settled down
$11.90, or 1.4 percent, at $867.90 an ounce on the COMEX
division of the New York Mercantile Exchange.
Holdings of the SPDR ETF fell by the most since Oct. 23 on
Thursday. The trust's gold fell 8.25 tonnes to 1,119.43 tonnes
from previous record levels. []
SPDR's holdings have surged by 75 percent over the last 12
months. Analysts fear significant selling from the fund -- the
world's sixth largest gold holder behind Italy -- could
precipitate a sharp drop in prices.
On the currency markets, the dollar rose to a one-month
high versus the euro after the head of the European Central
Bank failed to dispel uncertainty over the bank's policy.
"The firm dollar and the continued buoyancy of equities are
adding to gold's shaky near-term statement," said Bill O'Neill,
partner of LOGIC Advisors.
O'Neill said that possible selling pressure from the
International Monetary Fund's bullion holdings also weighed on
prices after market talk that India and China might press for
the sale of the entire 3,217 tonnes of IMF gold reserves.
Wall Street rose on Friday, adding to pressure on gold
after better-than-expected results from General Electric <GE.N>
and Citigroup <C.N>.
AKSHAYA TRITYA
On the demand side, gold buying in India, the world's
largest bullion buyer, has ticked up as prices fall. Buying
also accelerated ahead of the Hindu festival Akshaya Tritya on
April 27.
India's gold imports in the first 15 days of April were 10
tonnes as falling prices revived demand after very few imports
in the previous two months, the head of Bombay Bullion
Association (BBA) said on Thursday. []
Among other precious metals, spot platinum <XPT=> was at
$1,205.00 an ounce, up 0.3 percent from its late Thursday quote
of $1,201.50, while spot palladium <XPD=> was at $229.50 an
ounce, off 0.7 percent from its previous finish.
Swiss bank UBS raised its 2009 price view for platinum to
$1,100 an ounce from $1,050 previously, and its 2010 forecast
for the precious metal to $1,175 an ounce from $1,100.
Rhodium <RHOD-LON> climbed 30 percent this week as hopes
the downturn in the automotive sector is bottoming out lifted
interest in all the platinum group metals, which are a key
component in autocatalyst manufacture. []
(With additional reporting by Chris Kelly)
