* Gold buying in India muted after new restrictions
* Gold's target of $1,395 resumed -technicals
* Coming up: Euro zone Q1 GDP data, U.S. industrial output
(Adds quotes, updates price)
By A. Ananthalakshmi
SINGAPORE, May 15 (Reuters) - Gold inched up on Wednesday
after dropping for four straight sessions, as outflows from
exchange-traded funds halted, but firm equities could lure away
investors seeking better returns and keep a lid on bullion's
While gold has recovered around 8 percent from a two-year
trough hit in April, its safe-haven appeal has been battered by
record high U.S. equities, signs of an improving U.S. economy
and fears of a slowdown in demand from top consumer India.
Gold was up 0.1 percent at $1,426.56 at 0530 GMT.
Bullion has slumped more than 14 percent so far this year, after
gaining for the past 12 consecutive years as easy monetary
policy burnished its appeal as a hedge against inflation.
Holdings at SPDR Gold Trust, the largest gold-backed
ETF, were unchanged at 33.8 million ounces on Monday after
falling almost daily.
But the holdings were still within sight of their lowest
since March 2009 that was hit after funds cut their exposure to
bullion, whose historic fall in April took ardent gold investors
and bulls by surprise.
"I think what the market is concerned about is ETF
outflows," said Dominic Schnider, an analyst at UBS Wealth
Management. "I wouldn't be surprised if we touch $1,405 an ounce
in a short period of time. I would assume that it would help
revive some physical demand," he said.
U.S. gold futures for June rose slightly to
$1,425.50 an ounce.
A rally in U.S. stocks to fresh highs on Tuesday curbed
investors' interest in gold, while a slowdown in Indian demand
for the precious metal also weighed.
Gold buying in India came to a halt as the central bank
restricted imports after a surge in buying in April sent the
trade deficit to $17.8 billion for the month, up more than 72
percent from March.
India's gold and silver imports surged 138 percent on year
in April as customers took advantage of lower prices, increasing
pressure on the current account balance and limiting the space
for monetary easing even though inflation slowed in the month.
The import curbs by India are, however, only having a small
impact on spot gold prices, a dealer in Hong Kong said.
Premiums for gold bars in Hong Kong were at $3 to $4 an
ounce, the dealer added, compared with $3 last week. Hong Kong
is China's main source for gold imports.
Gold hit a more than two-year low of $1,321.35 in April
after a break below the key level of $1,500 ignited selling and
Cyprus' plan to sell excess gold reserves led to speculation
that other indebted euro zone countries could follow suit.
Portugal will not replicate a deal that allowed Cyprus to
sell its gold reserves under its bailout, Bank of Portugal
Governor Carlos Costa said on Tuesday.
PRECIOUS METALS PRICES 0530 GMT
Metal Last Change Pct chg YTD pct chg Volume
Spot Gold 1426.56 1.17 +0.08 -14.81
Spot Silver 23.30 -0.06 -0.26 -23.05
Spot Platinum 1496.70 0.20 +0.01 -2.50
Spot Palladium 720.38 -6.12 -0.84 4.10
COMEX GOLD JUN3 1425.50 1.00 +0.07 -14.94 12211
COMEX SILVER JUL3 23.28 -0.10 -0.42 -22.99 3946
COMEX gold and silver contracts show the most active months
(Editing by Lewa Pardomuan and Himani Sarkar)