* Gold briefly pierces 200-day moving average, but then
loses ground
* Dollar pares losses against euro
* GRAPHIC-Gold vs currencies: http://link.reuters.com/cyv95s
(Updating to recast, update prices, add comment)
By Josephine Mason and Jan Harvey
NEW YORK/LONDON, Oct 21 (Reuters) - Gold fell almost 1
percent on Wednesday for its biggest one-day loss in three weeks
on technical selling and long liquidation as the dollar
recovered ground versus the euro amid uncertainty over the
timing of a Federal Reserve interest rate hike.
Bullion briefly burst through a 200-day moving average
around $1,175 per ounce on Wednesday for a sixth straight day
before easing back more than $10 to a session low.
Its failure to hold above a long-term resistance undermined
sentiment and increased selling pressure.
"Some longs are taking profits as gold has struggled to hold
above the 200-day moving average, usually a significant
technical level and often signals a medium term change in
sentiment," said Tai Wong, director of base and precious metals
trading for BMO Capital Markets in New York.
The dollar pared earlier losses to trade little changed
against Europe's single currency as traders awaited the outcome
of a European Central Bank policy meeting on Thursday. FRX/
The ECB is unlikely to adjust its 60-billion-euros per month
asset purchase programme in October, but investors believe it
may hint at more stimulus later this year.
Spot gold XAU= was down 0.8 percent at $1,167.6 an ounce
at 3:34 p.m. EDT (1934 GMT), off a session high of $1,179.20.
U.S. gold futures GCv1 for December delivery settled down
$10.0 an ounce, or 0.9 percent, at $1,167.1.
In July, speculation that U.S. interest rates would rise
this year helped pressure gold to a 5-1/2-year low, but a raft
of downbeat U.S. data and concerns over Chinese growth have
since fuelled talk that the move may be postponed.
Rising rates tend to weigh on gold, as they lift the
opportunity cost of holding non-yielding assets, while
supporting the dollar, in which it is priced.
"Gold is just following U.S. (monetary policy)," Natixis
analyst Bernard Dahdah said. "Gold has risen $75 since early
September, based on expectations that a rate hike will happen in
2016, not the end of this year."
Among other precious metals, silver XAG= was down 1.3
percent at $15.77 an ounce, platinum XPT= was down 1.3 percent
at $1,006 an ounce and palladium XPD= was down 2.7 percent at
$679 per ounce.