* Gold reverses early losses on technical buying
* Bullion down tad in April, first 3-month drop since 2000
* CME briefly halted trade on COMEX after sharp drop
* Coming up: US construction spending Tuesday
(Adds new details, updates comment)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, April 30 Gold prices edged up
o n M onday on a better technical outlook after last week's gains,
but the precious metal finished slightly lower for the month of
April in a narrow trading range.
Bullion dropped about 0.3 percent in April, posting a third
straight monthly decline for the first time since 2000. A strong
run of U.S. economic data have hit hopes for more monetary
easing by the Federal Reserve, denting investment appetite for
the precious metal.
In early trading on Monday, bullion tumbled 1 percent in
heavy volume. Then it gradually turned higher. Analysts cited
technical buying as the metal held above key support last week.
"Gold posted a bullish outside week last week, adding
further fuel to our belief that a base is being formed for the
next rally higher," Tom Fitzpatrick, a strategist at Citigroup's
technical research unit CitiFX.
Gold's ability to hold above $1,620 an ounce this month,
despite several tests of that level, cheered investors.
Fitzpatrick said gold's next target could be its February
high at $1,790 an ounce, but its rise in the near term may be a
gradual grind instead of an imminent acceleration.
Spot gold inched up 0.1 percent to $1,664.20 an ounce
by 3:42 p.m. EDT (1942 GMT).
U.S. gold futures for June delivery settled down 60
cents an ounce at $1,664. Monday's volume was about 30 percent
below its 30-day average, preliminary Reuters data showed.
BRIEF US MARKET HALT
Early in the U.S. session, the June contract had tumbled as
much as $12 within a minute in one sell-order that involved
nearly 8,000 lots. The anomaly and its swift recovery has
spurred market talk that trade might have been entered
A CME Group spokesman said the exchange's Stop Logic
functionality was triggered on COMEX June futures Globex at 8:31
a.m. EDT ( 1231 GMT), resulting in a 10-second trading halt. But
he said the market worked in an orderly fashion.
CME Group's Stop Logic offers market participants the
opportunity to provide additional liquidity and permits the
market to regain its equilibrium.
"It was a very sudden hard drop, but there was no panic that
you'd see surrounded a fat finger," said James Steel, chief
commodity analyst at HSBC, referring to the sudden drop.
Analysts said prices tend to sharply recoil following the
so-called "fat finger" trade. On Monday, gold prices gradually
recovered rather than rebounding sharply.
News that Spain slipped back into recession also pressured
gold, traders said, as did a weak report on U.S. spending and a
sharp decline in business activity in the U.S. Midwest.
Investors were also wary of buying euros before weekend
elections in France and Greece and a European Central Bank
meeting this week that could further knock sentiment on the euro
Among other precious metals, silver was down 0.9
percent at $30.96 an ounce. Spot platinum eased 0.2
percent at $1,562.59 an ounce, while spot palladium eased
0.1 percent at $677.20 an ounce.
3:42 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold JUN 1664.20 -0.60 0.0 1645.10 1667.00 107,668
US Silver MAY 30.959 -0.388 -1.2 30.550 31.380 2,357
US Plat JUL 1571.90 -3.80 -0.2 1566.30 1578.80 2,842
US Pall JUN 682.35 0.85 0.1 675.60 685.00 1,717
Gold 1664.20 1.88 0.1 1645.50 1666.10
Silver 30.960 -0.270 -0.9 30.610 31.390
Platinum 1562.59 -3.76 -0.2 1568.75 1572.99
Palladium 677.20 -0.78 -0.1 677.75 682.25
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 121,211 170,578 196,158 18.19 1.09
US Silver 36,752 55,134 65,407 25.55 -1.01
US Platinum 2,895 7,241 8,363 19 0.00
US Palladium 1,937 2,713 4,697
(Editing by Bob Burgdorfer; Editing by David Gregorio)