* Gold posts biggest weekly decline since end of June
* Some investors see recovery due to "fiscal cliff"
* China, India physical demand falls, gold ETF holdings down
* Coming up: U.S. retail sales Monday
By Frank Tang
NEW YORK, Oct 12 (Reuters) - Gold fell nearly 1 percent on
Friday, its biggest daily drop in more than two months, as
improving U.S. consumer sentiment and jobs data stirred concern
the Federal Reserve might curb the monetary stimulus that has
boosted gold prices.
For the week, gold fell 1.5 percent, its largest weekly loss
since the last week of June.
"We are starting to see some improvement in the U.S.
economy, so the duration of a quantitative easing plan may not
be as long as what was initially anticipated," said Phillip
Streible, senior commodities broker at futures brokerage R.J.
O'Brien.
"People who buy gold as an inflation play are starting to
step out of the market," Streible said.
Bullion fell after data showed U.S. consumer sentiment
unexpectedly rose to a five-year high. On Thursday, weekly U.S.
jobless claims showed a surprise drop, more evidence of a
stronger labor market after the unemployment rate fell to a
four-year low of 7.8 percent last week.
Some analysts expected gold to rebound because of euro zone
debt worries and economic uncertainty amid prospects of a U.S.
"fiscal cliff" of automatic spending cuts and tax increases
scheduled for January. That scenario could shock the economy and
lead to more money printing from the Fed.
Spot gold fell 0.8 percent to $1,754.10 an ounce by
3:11 p.m. EDT (1911 GMT). The metal has now ended lower in five
of its last six sessions.
U.S. COMEX gold futures for December delivery settled
down $10.90 at $1,759.70, with trading volume at 40 percent
lower than its 30-day average, preliminary Reuters data showed.
Silver was down 1.4 percent at $33.52, heading for a
weekly loss of more than 2 percent.
Bullion posted four straight monthly increases prior to
October. Gold jumped to an 11-month high last Friday, but
failed to rise above $1,800 an ounce, triggering technical
weakness.
PHYSICAL BUYING SLOWS
In top gold consumer India, dealers said that physical
bullion demand was weak as a soft rupee has pushed up local gold
prices.
Holdings of gold-backed exchange-traded funds
also fell for the first time in two weeks on
Thursday, but were still close to a record high.
Platinum group metals fell in the absence of fresh news from
South Africa, where industrial unrest has shuttered the
operations of major platinum miners including Anglo American
Platinum, the world's largest producer of the metal.
Spot platinum was 1.6 percent lower at $1,647.20 an
ounce, while palladium fell 2.8 percent to $633 an ounce.
3:11 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold DEC 1759.70 -10.90 -0.6 1753.50 1775.00 117,604
US Silver DEC 33.669 -0.413 -1.2 33.510 34.165 35,675
US Plat JAN 1659.30 -30.30 -1.8 1655.50 1691.30 8,034
US Pall DEC 639.05 -11.85 -1.8 635.00 653.45 3,134
Gold 1754.10 -14.09 -0.8 1753.05 1773.10
Silver 33.520 -0.470 -1.4 33.490 34.120
Platinum 1647.20 -27.10 -1.6 1657.00 1683.24
Palladium 633.00 -18.30 -2.8 638.00 651.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 122,857 172,110 174,094 15.58 -0.25
US Silver 37,751 53,154 56,876 35 7.00
US Platinum 8,157 15,902 9,735 20.1 -0.07
US Palladium 3,159 4,377 4,807
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