Gold slips on taper worries, Fed in focus

Gold got off to a shaky start on Tuesday after gaining 1 percent in the previous session, as investors turned their attention to a Federal Reserve policy meeting next week that could provide clues on the outlook for the bank's stimulus.

FUNDAMENTALS * Spot gold had fallen 0.2 percent to $1,237.94 an ounce by 0020 GMT. It had gained over the last two sessions on short-covering, technical-selling and some fund-buying. Also read: Should market decide your asset allocation strategy? * Markets worry that the Fed could begin cutting its USD 85 billion monthly in bond purchases from its meeting on December 17-18 due to recent strong economic data. * The stimulus has supported gold prices as it boosts the metal's inflation-hedge appeal. * St. Louis Fed President James Bullard, who is sometimes seen as a bellwether for US monetary policy, on Monday offered his voice to a growing contingent at the central bank that has argued for reducing the Fed's bond buying at next week's gathering. * Russian gold production rose by 12 percent in the first 10 months of 2013 compared with the same period last year, an industry lobby said. * Barclays advised investors to short gold after March, its target period for any reduction in Fed stimulus.