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FUNDAMENTALS
* Spot gold
* Demand for bullion weakened as the dollar climbed to a two-week high against a basket of major currencies, with the euro tumbling on news the European Central Bank was looking to accelerate the pace of money printing to buy government bonds over the next two months.
* ECB executive board member Benoit Coeure said the speed of the recent spike in bond yields was worrisome and that the ECB could "moderately" increase its buying in May and June so that it did not fall below its monthly buying target.
* A stronger dollar makes gold more expensive for holders of other currencies, while also hurting its appeal as a hedge.
* Also eating into safe-haven bids for gold were U.S. and European equities, which rose near record highs on Tuesday.
* Separately, data on Tuesday showed U.S. housing starts jumped to their highest level in nearly 7-1/2 years in April and building permits soared.
* The robust reading, after a string of disappointing data, stoked expectations the U.S. economy could be regaining momentum in the second quarter, and possibly prompt the Fed to soon hike interest rates.
* Bullion had gained recently on hopes the Fed would delay a rate hike due to sluggishness in the economy.
* Traders will be eyeing minutes of the Fed's April meet, due to be released later today, to gauge the U.S. central bank's outlook on the economy and the rate policy.
* A drop in holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, to a four-month low of 718.24 tonnes on Monday also undermined investor appetite for gold.
* In the physical markets, India could allow individuals to deposit a minimum of 30 grams of gold with banks in return for interest payments to help monetise large quantities of the metal lying with households, a step that is aimed at cutting expensive imports.
* For the top stories on metals and other news, click
DATA/EVENTS (GMT)
0600 Germany Producer prices May
1800 Minutes of the April 28-29 Federal Reserve meeting
PRICES AT 0023 GMT Metal Last Change Pct chg
Spot gold 1209.2 1.86 0.15 Spot silver 17.06 0.02 0.12 Spot platinum 1148.98 -4.47 -0.39 Spot palladium 778.5 3.55 0.46 Comex gold 1208.7 2 0.17 Comex silver 17.1 0.029 0.17 Euro 1.1134 DXY 95.383
COMEX gold and silver contracts show the most active months
(Reporting by A. Ananthalakshmi) ((ananthalakshmi.as@thomsonreuters.com; +65 6870 3726; Reuters Messaging: ananthalakshmi.as.thomsonreuters.com@reuters.net; Twitter: @AnanthalakshmiA))
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Keywords: MARKETS PRECIOUS/