* Gold up over 2 pct for week, largest weekly gain in 10
* U.S. stocks ease, equities' weakness supports gold
* Good gold coin buying, Chinese physical demand help
* Coming up: U.S. factory orders Monday
(Adds more comment, market details, updates market activities)
By Frank Tang and Julia Fioretti
NEW YORK/LONDON, Jan 3 Gold rose 1 percent on
Friday, rallying for a second consecutive day with a boost from
renewed fund buying and equities' weakness after bullion posted
its worst annual decline in 2013 in more than 30 years.
Brisk coin buying, strong Chinese physical demand and new
positions initiated by funds related to new-year index
rebalancing also helped lift gold to a weekly gain of more than
2 percent, its largely rise in 10 weeks.
Analysts said gold appeared to find support from equities'
losses this week after bullion's tumble and the stock market's
strong run last year.
"Positive bullion prices in reaction to the decline in
equities may set the tone for 2014 and reinforce the negative
correlation between the two," said James Steel, chief precious
metals analyst at HSBC.
Spot gold was up 1.1 percent to $1,237.40 an ounce by
2:01 p.m. EST (1901 GMT).
Traders also cited short covering for the metal's strength
as bullion has rallied more than 4 percent after hitting a
six-month low at under $1,200 an ounce on Tuesday.
U.S. Comex gold futures for February delivery settled
up $13.40 at $1,238.60 an ounce, with trading volume about 20
percent below its 30-day average, preliminary Reuters data
Gold's gains came after it lost nearly 30 percent in 2013,
ending a 12-year bull run, largely due to the U.S. Federal
Reserve's plan to unwind its monetary stimulus.
Bullion's second day of sharp gains came as U.S. stocks
eased on Friday, extending a broad decline in the new year with
major indexes on track to end the week lower.
Premiums on the Shanghai Gold Exchange showed that Chinese
buying has picked up in recent days as global prices hovered
around $1,200 near the end of 2013, dealers said.
Also boosting gold market sentiment were brisk sales of the
U.S. Mint's new 2014-dated American Eagle gold coins on the
first business day of the year, extending last year's strength
boosted by gold prices' broad decline.
Some analysts, however, cautioned that the upward momentum
in the early days of the new year may only last a few weeks due
to some index rebalancing activity.
A stronger U.S. dollar and heavy losses in crude oil prices
this week could pressure the precious metal as more participants
return next week following the recent holidays, said Edward
Meir, metals analyst at brokerage INTL FCStone.
Among other precious metals, silver rose 0.4 percent
to $20.08 an ounce. Platinum gained 0.4 percent to
$1,406.74, and palladium eased 0.1 percent to $725.72 an
Platinum group metals now digest news that the top four
automakers in the U.S. market missed December sales
expectations. However, 2013 will still easily be the best year
for the industry since before the recession.
2:01 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold FEB 1238.60 13.40 1.1 1221.30 1239.60 101,552
US Silver MAR 20.211 0.083 0.4 19.985 20.325 26,982
US Plat APR 1414.20 9.60 0.7 1401.10 1418.00 6,057
US Pall MAR 731.20 0.95 0.1 725.15 733.65 2,148
Gold 1237.40 12.89 1.1 1222.53 1240.00
Silver 20.080 0.080 0.4 20.020 20.300
Platinum 1406.74 6.24 0.4 1404.25 1414.75
Palladium 725.72 -0.53 -0.1 728.25 730.47
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 108,445 130,519 187,175 19.96 -0.82
US Silver 28,620 38,951 57,537 27.47 -2.22
US Platinum 6,133 15,140 13,188 18.77 0.82
US Palladium 2,230 3,304 5,856 19.61 -0.16
(Editing by William Hardy, Nick Zieminski and Chris Reese)