* Spot gold to test support at $1,701/oz - technicals
* Amplats says output at S. Africa mines yet to start
* China's Jan-Sep gold output up 11.3 pct on yr - govt
By David Brough
LONDON, Nov 16 Gold drifted lower with shares on
Friday and headed for a weekly loss, as investors focused on
uncertainty over global growth and worries over the so-called
U.S. "fiscal cliff".
Spot gold edged down 0.39 percent to $1,708.54 an
ounce by 1242 GMT, on track for a weekly loss after prices
climbed more than 3 percent last week.
U.S. gold was down $4.80 at $1,709.00.
Gold had slid more than 1 percent to a one-week low on
Thursday following falls in equity markets.
European shares fell for a third day on Friday as the weak
economic outlook, uncertainty over U.S. budget talks and an
upsurge of violence in the Middle East weighed on investors.
Gold edged down as some investors liquidated profits from
bullion to cover losses in other markets such as equities.
Investors see gold as a risky asset similar to other
commodities or shares. However, gold can resort to being a safe
haven in times of deep economic uncertainty.
"Gold is being seen increasingly as a source of cash.
Liquidation of gold can cover losses elsewhere," said Simon
Weeks, head of precious metals at Scotia Mocatta, referring to
Friday's slippage in gold with equities.
The gold market's attention is on the budget talks between
U.S. President Barack Obama and Congressional leaders. As the
two sides prepared for the talks on Friday aimed at preventing
the U.S. economy from falling back into recession, Democrats and
Republicans dug in on their long-held opposing positions.
Gold's safe haven status would shine in the case of failed
talks and political paralysis, while success in avoiding the
fiscal disaster may dampen sentiment in gold, analysts said.
Technical analysis suggested that spot gold could test
support at $1,701 an ounce, a break below which will open the
way towards $1,672.24, according to Reuters market analyst Wang
Gold has drifted around $1,720 an ounce over the past week
or so as support from President Obama's re-election faded and
political uncertainty around the fiscal problems kept some
investors on the sidelines.
But gold investment demand remains resilient. Holdings of
the SPDR Gold Trust GLD, the world's largest gold-backed
exchange-traded fund, rose to 1,339.616 tonnes by Nov. 15, just
a touch off the record high of $1,340.521 tonnes hit in October.
Prominent hedge fund manager John Paulson kept a major stake
in gold in the third quarter of 2012, a confidence boost to
bullion's appeal as a hedge against economic uncertainty, a U.S.
regulatory filing showed on Thursday.
China produced 38.5 tonnes of gold in September, bringing
total output in the first eight months of the year to 288.2
tonnes, up 11.3 percent from a year ago, the Ministry of
Industry and Information Technology said on Friday.
Oil firmed over $108 a barrel on Friday, as uncertainties
surrounding the global economic outlook weighed on prices, and a
showdown between Israel and the Palestinians stoked worries
Platinum group metals prices came under downward pressure
after the end of strikes that had swept South Africa's mining
Platinum eased 1.34 percent to $1,548.25, while
sister metal palladium was last at $623.25, down 0.95
Anglo American Platinum said on Friday production
at its South African operations where workers went on an illegal
strike will not resume in the coming week because of safety
Silver was down 1.01 percent at $32.26 an ounce.