Gold eases after sharp jump, still near 3-week high

SINGAPORE (Reuters) - Gold slipped on Tuesday after posting sharp gains in the previous session but was still near three-week highs on hopes that physical buyers and investors will return to the market.

FUNDAMENTALS

Spot gold eased 0.2 percent to $1,332.56 an ounce by 0023 GMT, not far from a three-week high of $1,343.06.

Gold rose nearly 2 percent on Monday on strong Chinese gold consumption and an inflow to gold-backed exchange-traded funds.

China's gold consumption surged in the first six months of the year as sliding prices of the metal lured buyers, data showed, reinforcing expectations that the nation will overtake India as the world's top gold consumer this year.

Central banks, key players in gold's meteoric 12-year rise, are losing enthusiasm for the metal as official sector purchases show signs of decline, with fading emerging market buying power and lower prices expected to see the pace slow further.

Indians bought more gold in July than June despite a series of moves by the central bank to strangle supplies, and their insatiable appetite has forced neighbouring countries to take steps to curb their own imports.

China has fined five domestic jewellers 10.1 million yuan for fixing their prices, state media said on Monday.

Indian Finance Minister P. Chidambaram said the government will take steps to curb imports of gold and silver, and look to contain gold imports at 850 tonnes this year.

(Reporting by A. Ananthalakshmi; Editing by Richard Pullin)