* Gold up 1.3 percent on the week
* Gaza in focus, less worry over Portugal's Banco Espirito
(Recasts with close in U.S. gold futures; adds new comment,
byline and NEW YORK to dateline)
By Barani Krishnan and Jan Harvey
NEW YORK/LONDON, July 11 Gold prices were flat
on Friday as investors grew less worried about Portugal's top
listed bank, but the precious metal notched its sixth straight
weekly gain as many remained concerned about violence in the
U.S. Treasuries prices also rose, pushing benchmark yields
to five-week lows as investors sought a hedge against any market
disruptions by intensified fighting in Gaza. Equities prices
steadied as Portugal's government and central bank assured
investors that the country's financial system was sound despite
problems at Banco Espirito Santo.
"We may have Portugal out of the headlines, but we've a lot
of geopolitical tensions to contend with, with the Israeli air
strikes going on now," said George Gero, gold market commentator
and senior vice-president at RBC Wealth Management in New York.
A fourth day of Israeli air strikes on the Gaza Strip killed
11 more Palestinians on Friday, raising the death toll in the
coastal enclave to at least 96, most of them civilians,
Palestinian officials said.
At 3:20 p.m. EDT (1920 GMT), the spot price of gold
was up 0.2 percent at $1,337 an ounce, not far from the 3-1/2
month of $1,345 set in the previous session. For the week, it
rose 1.3 percent, for a six straight week of gains.
U.S. gold futures' most active contract, for August
delivery, settled down by a modest $1.80 at $1,337.40.
"For many investors, it is safe havens that are currently in
demand," said Peter Fertig, a consultant at Quantitative
Commodity Research. "Investors have discovered gold again as an
asset class that could provide some protection, after last year
they clearly preferred the stocks market and risky assets."
Gold surged on Thursday after Espirito Santo Financial Group
, the largest shareholder in Portugal's Banco Espirito
Santo, suspended trading in its shares and bonds, citing
"material difficulties" at parent company ESI. It was the first
significant episode of contagion for European peripheral markets
this year, and it curbed demand at Greece's second debt sale
following its 2012 default.
On Thursday, holdings of the world's largest gold-backed
exchange-traded fund, New York's SPDR Gold Shares, had the
first outflow since mid-June as some ETF investors took profit
after Thursday's rally.
Spot silver was almost flat at $21.38 an ounce,
having also hit its highest in nearly four months on Thursday at
$21.55. It was also up almost 2 percent for a six straight week
Spot platinum was down 0.2 percent at $1,507.24 an
ounce, while spot palladium was up 0.3 percent at
$869.72, after Thursday's 13-1/2 year high of $875.60.
(Additional reporting by A. Ananthalakshmi in Singapore;
editing by Dale Hudson, Jason Neely and David Gregorio)