PRECIOUS-Gold posts 5th weekly gain on emerging market jitters

Fri Jan 24, 2014 2:54pm EST

* Unsteady currency market prompts wave of gold buying
    * Prices set for fifth week of gains as equities weaken
    * Gold premiums in India down 30 pct on import speculation
    * Coming up: CFTC Commitments of Traders report Friday

 (Updates market activities)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, Jan 24 (Reuters) - Gold rose to a two-month
high on Friday, posting its fifth consecutive weekly gain as a
global flight from emerging-market assets and declines in
equities increased bullion's safe-haven appeal.
    Volatility in the currency market led by the plummeting
Argentina peso and Turkish lira prompted investors to buy gold,
traders said. 
    The yen surged to a seven-week high against the dollar,
while the Swiss franc climbed to a five-week peak against the
euro as investors sought refuge in safe-haven assets after a
sell-off in emerging market currencies. 
    A second consecutive day of sharp losses in U.S. equities
also lifted gold. The S&P 500 index fell almost 2
percent. 
    However, gold investment demand remains weak, with the
world's largest gold-backed exchange-traded fund SPDR Gold
Shares posting a 5.4-tonne outflow on Thursday. Last week,
it logged its first weekly inflow since early November.
 
    "It is questionable whether the price rise will be
sustainable given that six tons were withdrawn from the gold
ETFs yesterday," said Eugen Weinberg, head of commodity research
at Commerzbank.
    "The latest development is more likely to have been driven
by speculation," Weinberg said.
    Spot gold inched up 56 cents at $1,264.51 an ounce by
2:29 p.m. EST (1929 GMT), having earlier hit $1,272.70, its
highest since mid-November. 
    U.S. gold futures for February delivery settled up $2
at $1,264.30, with trading volume about 5 percent above its
250-day average, preliminary Reuters data showed.
    For the week, bullion is up 1 percent, its fifth straight
weekly gain for the first time since September 2012.

    ASIAN GOLD PREMIUMS DOWN
    Investors, however, are still wary of a market that took its
biggest tumble in more than 30 years in 2013. 
    Chinese demand eased, with premiums on the Shanghai Gold
Exchange dropping to $10 an ounce from $12 the previous day.
China in 2013 took over from India as the world's leading
consumer of gold jewellery, data from metals consultancy Thomson
Reuters GFMS showed. 
    Gold premiums in India fell more than 30 percent on Friday
from earlier this week on speculation over a possible easing of
restrictions on bullion imports.  
    Among other precious metals, platinum fell 1.9
percent to $1,423.99 an ounce as traders bet that strikes in
South Africa's platinum mining sector would be less damaging
than feared. 
    Silver fell 1 percent to $19.79 an ounce, taking a
lead from gold, while palladium was down 1.5 percent at
$731 an ounce.
 2:29 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold FEB   1264.30   2.00   0.2  1256.80 1273.20  146,712
 US Silver MAR  19.765 -0.245  -1.2   19.715  20.285   39,911
 US Plat APR   1428.60 -34.60  -2.4  1423.00 1462.00   16,003
 US Pall MAR    734.80 -11.10  -1.5   733.30  748.30    4,745
                                                               
 Gold          1264.51   0.56   0.0  1257.25 1272.70         
 Silver         19.790 -0.200  -1.0   19.740  20.270
 Platinum      1423.99 -28.01  -1.9  1426.50 1458.00
 Palladium      731.00 -11.00  -1.5   736.00  746.00
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        191,227   130,505   187,172     17.12    0.61
 US Silver       43,750    37,543    57,154     25.86    1.08
 US Platinum     16,053    10,720    12,680     15.01    0.34
 US Palladium     4,900     2,962     5,853      15.2   -1.88
                                                               
    

 (Additional reporting by Veronica Brown in London, A.
Ananthalakshmi in Singapore; Editing by Dale Hudson, Jane Baird,
Marguerita Choy and Paul Simao)