Gold fell for the first time in three days in New York

Gold fell for the first time in three days in New York as the Federal Reserve refrained from making further purchases of government bonds, curbing demand for the metal as a protection of wealth.

The dollar was little changed against the euro before data forecast to show growth in U.S. industrial production, supporting the Fed's comments that the U.S. economy is recovering. The central bank yesterday held a $ 600 billion debt purchases. The dollar rose 0.7 percent against the euro today. Gold futures set a record $ 1432.50 an ounce on 07 December.

The Fed "will not increase the volume of Treasury purchases," said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, in a report today. "This could weigh on gold prices in the short term. One of the reasons for the decline in prices is the strong U.S. dollar again yesterday."

Gold futures for February delivery fell $ 9.80, or 0.7 percent, to $ 1,394.50 an ounce at 8:02 am on the Comex in New York. The metal for immediate delivery in London was 0.2 percent, to $ 1,394.05.

Gold gained 27 percent this year, set for an annual gain of 10, as investors lost confidence in the currency and buy precious metals as a hedge of wealth. European Union leaders will meet this week amid dissension about how to stop a debt crisis which made Greece and Ireland to accept bailouts. The dollar strengthened after Moody's Investors Service said the rating is Spain's debt on review for possible downgrade.

U. S. Growth "insufficient"

More government bond purchases by the Fed are "certainly possible", said Chairman Ben S. Bernanke, in an interview broadcast on CBS Corp. s "60 Minutes" on Dec. 5. The Fed said yesterday that growth is "insufficient to reduce unemployment."

the U.S. factory production rose 0.3 percent in November, according to the median estimate of 78 economists surveyed by us before the Fed released information today. U.S. sales retail rose 0.8 percent last month, the Commerce Department said yesterday.

"Expectations that the U.S. economy will doubtless grow after retail sales rose and after the Fed meeting," said Hwang Il Doo, a senior trader at Korea Bank Futures Co. in Seoul . "That's a weight in gold."

gold assets in exchange-traded products fell 4.83 to 2,091.56 tons metric tons yesterday. Holdings reached a record 2,104.65 tonnes on 14 October. won silver holdings to 73.08 tonnes 15,163.25 tonnes, the highest amount since at least February, data from four suppliers of entertainment.

Silver for March delivery in New York fell 1.6 percent to $ 29.30 an ounce. It rose to $ 30.75 on 7 December, the highest since March 1980 and 74 percent this year. Prices reached a record high of $ 50.35 in New York in 1980, a year after the Hunt brothers tried to corner the market.

Palladium for March delivery fell 2.2 percent to $ 751.25 an ounce. It rose to $ 780 on 3 December, the highest since April 2001. Platinum for January delivery was 0.8 percent, to $ 1.701 an ounce.