* Gold falls below 200-day moving average
* U.S. housing data, European bank repayment weigh
* Bullion could test support at $1,640-50 before rebound
* Coming up: U.S. durable goods on Monday
(Adds market details, graphic link, updates prices)
By Frank Tang
NEW YORK, Jan 25 Gold notched its biggest weekly
drop this year as an improving global economic outlook sent the
safe-haven metal below a key technical support.
Bullion fell below its 200-day moving average, which it had
held for the most part in the last five months, as U.S. equities
measured by the S&P 500 rose for an eighth day for its
longest winning streak in more than eight years.
Friday's encouraging U.S. housing data and signs of
stability in the euro zone pressured gold. Traders said next
week's Federal Reserve policy meeting and U.S. employment data
will likely set the tone for the gold market.
"If next week's unemployment number comes in a little better
than expected or even at expectation, that will put pressure on
the market," said Frank McGhee, head precious metals trader at
Integrated Brokerage Services LLC.
Spot gold was down 0.6 percent at $1,657.54 an ounce
by 3:15 PM (2015 GMT), having earlier touched its lowest since
Jan. 11 at $1,655.39 an ounce.
The metal was 1.5 percent lower this week, its worst weekly
performance since the week of Dec. 23.
Gold could rise toward $1,680 late next week after a test of
support at $1,640-1,650 due to weak technical momentum, said
Carlos Sanchez, director of commodities and asset management at
Gold priced in euros fell further, touching an
eight-month low at 1,230.03 euros an ounce, as the single unit
rallied on news banks will pay more cash than expected back to
the European Central Bank in a sign that the banking system was
Gold also came under pressure after data showed sales of new
U.S. single-family homes rose last year to the highest since
2009 despite a weak December.
U.S. COMEX gold futures for February delivery settled
down $13.30 at $1,656.60 an ounce.
Trading volume was 10 percent above its 250-day average,
preliminary Reuters data showed, partially boosted by
February-April contract rollover ahead of February's
first-notice day on Jan. 31.
Silver, which tends to be more volatile than gold,
dropped 1.5 percent to $31.14 an ounce.
PHYSICAL DEMAND IMPROVING
Bullion buying from China and India, the world's two largest
gold consumers, has dwindled after a brisk start in the first
two weeks of January, dealers said.
The price slump of the past few days, however, has triggered
some physical buying interest, they said.
Bullion investors now await next week's Fed Open Market
Committee (FOMC) statement on Wednesday and nonfarm payrolls on
Friday for more clues on U.S. monetary policy and the state of
the world's largest economy.
Among platinum group metals, platinum was up 0.7
percent at $1,690.12 for a nearly 1.5 percent weekly gain,
extending its winning streak to a fourth week, its longest in a
year. Spot palladium rose 1.9 percent to $737.81 an
3:15 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1656.60 -13.30 -0.8 1655.00 1671.60 146,258
US Silver MAR 31.206 -0.516 -1.6 31.125 31.815 40,234
US Plat APR 1694.90 11.10 0.7 1675.00 1695.90 9,439
US Pall MAR 741.00 14.30 2.0 723.10 742.10 6,878
Gold 1657.54 -9.82 -0.6 1655.39 1672.20
Silver 31.140 -0.490 -1.5 31.140 31.760
Platinum 1690.12 12.13 0.7 1677.50 1691.50
Palladium 737.81 13.84 1.9 725.50 739.50
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 193,200 151,420 174,136 13.63 0.95
US Silver 43,205 42,524 53,317 19.91 0.00
US Platinum 9,598 15,747 10,839 16.96 -0.11
US Palladium 6,960 3,314 4,797
(Additional reporting by Clare Denina and Jan Harvey in London;
editing by Sofina Mirza-Reid and Carol Bishopric)