* Fed's Bullard said could change outlook for further rate
hikes
* Firmer oil, stock markets could blunt gold's safe haven
appeal
* GRAPHIC-Commodities in 2016 - http://link.reuters.com/reb25t
(Rewrites throughout, updates prices; adds comment, second
byline, NEW YORK dateline)
By Marcy Nicholson and Jan Harvey
NEW YORK/LONDON, Jan 14 (Reuters) - Gold fell sharply to a
1-1/2-week low on Thursday, pressured by a U.S. Federal Reserve
president's comments about potentially rethinking further rate
hikes, triggering technical sell signals while shrugging off a
rebound from 12-year lows in oil prices.
Crude oil prices rebounded from 12-year lows and led the
beaten-up U.S. stock market higher, pointing to a recovery in
risk appetite and blunting bullion's appeal as a haven. The
dollar .DXY turned higher. MKTS/GLOB
Spot gold XAU= was down 1.5 percent at $1,076.35 an ounce
by 3:10 p.m. EST (2010 GMT), its weakest session since Dec. 17
after falling 2 percent to $1,071, the lowest since Jan. 4.
U.S. gold futures GCv1 for February delivery settled down
1.2 percent at $1,073.60 an ounce.
St. Louis Federal Reserve President James Bullard said a
continued decline in inflation expectations may change his
outlook for further Fed rate hikes, though so far he feels the
United States continues on a healthy track.
"I think those comments initiated a technical breach," said
Eli Tesfaye, senior market strategist for brokerage RJO Futures
in Chicago, adding that technical selling came in at the prior
session's opening level as well as its low.
Bullard's comments followed those by Chicago Fed President
Charles Evans on Wednesday, when he said he was nervous about
the potential effects of China's slowdown on the U.S. economy
and about the possibility that inflation expectations may be
slipping.
The metal hit two-month highs at $1,112 last week as
volatility in Chinese stocks battered appetite for risk, but
trading has since been down for four out of five sessions.
A retreat in the euro from earlier highs after dovish
minutes from the European Central Bank's December meeting added
to pressure on gold, while some investors looked to be cashing
in some of the previous session's gains, dealers said.
"A little bit of it may be producer selling because they
don't want to be caught lower ... (and) it could very well be
profit-taking," said Afshin Nabavi, head of trading at MKS.
The world's largest gold-backed exchange-traded fund, New
York-listed SPDR Gold Shares GLD , reported a 2.4 tonne rise in
its holdings on Wednesday, bringing its total inflow for the
year to 11.7 tonnes.
Among other precious metals, silver XAG= saw the biggest
fall, sliding 2 percent to $13.83 an ounce, erasing the bulk of
the previous day's gains.
Palladium XPD= was up 0.6 percent at $488 an ounce, while
platinum XPT= lost 1.2 percent to $837.12.
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