PRECIOUS-Gold rises 1 pct on bargain hunting, posts weekly gain

Fri Dec 13, 2013 4:55pm EST

* Gold ends about 1 pct up for the week
    * Focus on timing of reduction in U.S. stimulus
    * Coming up: US productivity data Monday

 (Adds second dateline, byline, updates market activity)
    By Julia Fioretti and Frank Tang
    LONDON/NEW YORK, Dec 13 (Reuters) - Gold rose 1 percent on
Friday, helped by bargain-hunting after a sharp two-day plunge,
but analysts said the market remains vulnerable to the downside
ahead of the all-important Federal Reserve policy meeting next
    For the week, gold was up almost 1 percent on a lower dollar
and heavy short-covering earlier in the week.
    Stronger-than-expected U.S. retail sales numbers on
Thursday, adding to last week's forecast-beating jobs report,
strengthened speculation the Fed could start winding down its
bond purchases at its Dec. 17-18 meeting.
    Adding to the rosier economic picture was news that U.S.
lawmakers had struck a tentative budget deal that would avoid a
government shutdown in January. 
    "The data, as well as the budget deal, have been modestly
encouraging, and it shifted opinion back towards tapering in
December," said HSBC chief precious metals analyst James Steel.
    "We had a big decline yesterday and this is really a round
of short-covering going on right now," Steel said of gold.
    Spot gold climbed 1.1 percent to $1,237 an ounce by
3:22 p.m. EST (2022 GMT). U.S. gold futures for February
delivery settled up $9.70 at $1,234.60, with trading
volume about 40 percent below its 30-day average, preliminary
Reuters data showed.
    Gold is headed for a 26 percent decline this year, its first
annual decline since 2000. Investors, encouraged by a recovering
global economy, pulled money from gold and channeled it into
riskier assets such as equities.
    Holdings in SPDR Gold Trust, the biggest gold ETF,
fell the most in nearly two months on Thursday. The fund has not
seen inflows in more than a month, hinting that a substantial
upside in prices is limited, traders said. 
    Silver took its cue from gold, rising 1.1 percent to
$19.67 an ounce. 
    Platinum group metals largely ignored news that South
Africa's National Union of Mineworkers (NUM) said on Thursday it
had agreed a two-year wage deal for pay increases of 7.5 to 8.5
percent with Anglo American Platinum, the world's top
producer of the precious metal.
    Platinum eased 0.1 percent to $1,357.70, and
palladium also dropped 0.1 percent to $714.
 3:45 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold FEB   1234.60   9.70   0.8  1219.50 1238.10  106,577
 US Silver MAR  19.604  0.151   0.8   19.280  19.740   32,779
 US Plat JAN   1362.90  -1.50  -0.1  1356.30 1370.30    9,084
 US Pall MAR    716.20  -4.05  -0.6   715.05  725.75    3,483
 Gold          1237.00  13.40   1.1  1220.80 1238.50         
 Silver         19.670  0.220   1.1   19.330  19.740
 Platinum      1357.70  -1.05  -0.1  1361.75 1369.00
 Palladium      714.00  -0.72  -0.1   716.00  723.50
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        111,387   173,576   188,333     21.32    0.11
 US Silver       34,466    59,224    57,746     28.77    1.62
 US Platinum     11,417    10,525    12,510     16.33    0.11
 US Palladium     3,592     7,451     5,925     20.99    0.77
 (Editing by Alden Bentley)
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