* Gold up Friday on physical demand, ignores strong dollar
* Deutsche Bank pulls out of gold, silver fix
* South Africa's union votes in favour of wage strike
* US markets shut on Martin Luther King Jr day Monday
(Adds comment, second byline, dateline, updates market
By Frank Tang and Clara Denina
NEW YORK/LONDON, Jan 17 Gold rose on Friday as
weakness in U.S. equities, strong fund buying and Asian physical
demand lifted bullion to its fourth consecutive weekly gain.
The market was surprised by news of Deustche Bank
withdrawing from gold and silver benchmark setting, or fixing,
as German regulators investigate suspected manipulation of
precious metals prices by banks.
Deutsche, one of five banks involved in the twice-daily gold
fix for global price setting, said Friday it was dropping out of
the process after withdrawing from the bulk of its commodities
Gold's recent rise has been supported by a drop in equities
early in 2014 following a record run-up in stocks last year.
However, analysts said that a rising interest-rate environment
and a better economic outlook could pressure gold.
"In the long run, we are likely to see selloffs in gold
especially with more Fed tapering later this year," said Thomas
Capalbo, a precious metals trader at Newedge, a brokerage in New
Spot gold, which fell initially, climbed 0.8 percent
to $1,252.11 an ounce by 2:45 p.m. EST (1945 GMT).
For the week, it was up 0.5 percent, extending its weekly
winning streak to four - its longest rise since September 2012.
U.S. gold futures for February delivery settled up
$11.70 at $1,251.90 an ounce, with trading volume about 40
percent below its 250-day average, preliminary Reuters data
Gold rose on Friday against the headwinds of a stronger
dollar after fresh U.S. data supported the view the world's
largest economy is improving enough to keep the Federal
Reserve's stimulus-reducing measures on track.
Data showed U.S. industrial output rose at its fastest clip
in 3-1/2 years in the fourth quarter as factory activity closed
out the year on a strong note, a sign of the economy's
In China, physical gold premiums on the
Shanghai Gold Exchange rose on Friday. Buying from China, the
world's biggest gold consumer, has been robust in recent weeks
ahead of the Lunar New Year holiday on Jan. 31.
Among other precious metals, silver rose 1.2 percent
to $20.29 an ounce.
Platinum group metals were supported by supply worries as
members of the South Africa's Association of Mineworkers and
Construction Union voted in favour of a strike over wages at the
world's third-biggest platinum producer Lonmin.
Platinum gained 1.7 percent to $1,448.99 an ounce,
while palladium was up 0.5 percent to $743.50 an ounce.
2:45 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1251.90 11.70 0.9 1237.30 1254.60 103,818
US Silver MAR 20.304 0.250 1.2 19.960 20.425 30,243
US Plat APR 1454.10 22.60 1.6 1431.50 1457.90 11,389
US Pall MAR 748.55 4.65 0.6 741.50 753.30 3,592
Gold 1252.11 10.02 0.8 1238.10 1254.80
Silver 20.290 0.240 1.2 19.990 20.410
Platinum 1448.99 23.74 1.7 1433.50 1453.25
Palladium 743.50 3.75 0.5 743.20 750.75
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 114,740 134,466 187,532 16.52 -1.00
US Silver 33,619 38,829 57,339 24.63 -0.24
US Platinum 11,888 13,249 12,692 14.36 -0.87
US Palladium 3,780 3,053 5,844 16.33 -0.55
(Additional reporting by A. Ananthalakshmi in Singapore;
editing by William Hardy, David Evans and Meredith Mazzilli)