PRECIOUS-Gold down, still posts biggest weekly gain in 3 months

Fri Apr 26, 2013 3:57pm EDT

* Gold posts biggest weekly gain since January
    * Bullion has recovered over half of recent losses
    * Sentiment still unsure as ETFs head for exit
    * Coming up: U.S. personal income Monday


    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, April 26 (Reuters) - Gold fell in choppy
trade on Friday on as investors took profits, but the market
still posted its biggest weekly gain in three months on strong
physical demand after bullion hit a two-year low last week.
    Bullion has recovered more than half of the loss of $225 per
ouce incurred between April 12 and 16.
    In early trade, gold rose more than 1 percent after the U.S.
Commerce Department reported that economic growth regained speed
in the first quarter, but not as much as expected. Gold gave
back those early gains and slid into negative territory as
options-related selling kicked in, and losses in industrial
commodities including crude oil and copper also weighed.
    Investors in exchange-traded funds headed for the exits,
worried about potential central bank sales of bullion and
uncertainty over the outlook for U.S. monetary stimulus.
    "There is still some long liquidation in the market,
suggesting that some investors are still repositioning
themselves, and that leaves the price vulnerable to some
sideways actions," said Erica Rannestad, precious metals analyst
at the CPM Group.
    Spot gold was down 0.6 percent at $1,457.76 an ounce
by 3:28 p.m. EDT (1928 GMT), off the session high of $1,484.80.
    U.S. gold futures for June delivery settled down
$8.40 at $1,484.80 an ounce. Trading volume was about 10 percent
above its 30-day average, preliminary Reuters data showed.
    U.S. first-quarter growth expanded at a 2.5 percent annual
rate, missing economists' expectations for 3 percent. Meanwhile,
a separate report on consumer sentiment showed a drop from the
previous month. 
    "That (GDP) is encouraging for gold because the whole
sell-off in the metal was linked to perceptions that the U.S.
economy was getting stronger and stronger," Societe Generale
analyst Robin Bhar said. 
    Silver also rose early, hitting a 10-day high of
$24.82. Then it slid, down 1.7 percent in late trade to $23.91
an ounce.
    
    STRONG PHYSICAL DEMAND
    Physical buying persisted in Asia, with premiums for gold
bars in Hong Kong jumping to their highest level since October
2011 this week, at up to $3 an ounce to spot London prices.
 
    Premiums in Singapore stayed at their highest since October
2008 at $3 an ounce to the spot London prices on demand from
Indonesia, Thailand and India.
    But while physical demand has been strong, China, the
second-largest gold consumer after India, will be on holiday for
three days next week for the May Day break, possibly removing
significant support from the market, traders said. 
    A daily drop in exchange-traded funds' holdings suggested
that gold investors were still licking their wounds after
bullion's historic fall last week.
    Holdings of the largest gold-backed exchange-traded fund,
the SPDR Gold Trust, dipped 0.25 percent to 1,090.27
tonnes on Thursday, from 1,092.98 on Wednesday. Holdings are at
their lowest level since September 2009. 
    Among platinum group metals, platinum gained 0.4
percent to $1,472.49 an ounce, while palladium was down
0.4 percent at $677.25 an ounce.
 3:28 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1453.60  -8.40  -0.6  1447.30 1484.80  226,559
 US Silver MAY  23.758 -0.382  -1.6   23.590  24.795   83,364
 US Plat JUL   1476.50  12.40   0.8  1464.00 1499.80   15,266
 US Pall JUN    681.95   0.55   0.1   676.20  687.00    4,031
                                                               
 Gold          1457.76  -9.23  -0.6  1449.23 1484.81         
 Silver         23.910 -0.420  -1.7   23.660  24.820
 Platinum      1472.49   5.99   0.4  1466.50 1496.50
 Palladium      677.25  -2.75  -0.4   677.75  683.97
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        250,721   229,180   180,294     22.26    1.91
 US Silver      150,527    70,759    55,549     25.21   -5.65
 US Platinum     15,344    15,452    12,161     19.03   -0.08
 US Palladium     4,200     5,222     5,310
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