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PRECIOUS-Gold down for week on dollar rise, Fed; platinum drops
May 9, 2014 / 10:11 AM / 3 years ago

PRECIOUS-Gold down for week on dollar rise, Fed; platinum drops

* Sharp dollar gains weigh down on gold
    * Ukraine tensions, technical support help
    * Worries of Fed rate hike creep up
    * Coming up: U.S. federal budget Monday

 (Updates market activities)
    By Frank Tang and Jan Harvey
    NEW YORK/LONDON, May 9 (Reuters) - Gold dropped on Friday,
notching its second consecutive weekly drop, with selling
triggered by a sharp rise in the U.S. dollar and analysts'
expectation that the Federal Reserve could raise interest rates
next year.
    Platinum group metals also fell on news that some miners in
top platinum producer South Africa are returning to work,
offering hope that the country's longest and most costly strike
could end soon.
    Heightened geopolitical tensions underpinned bullion prices
after Russia's President Vladimir Putin flew to Crimea for
parades marking the Soviet victory in World War Two, his first
visit since annexing the peninsula from Ukraine. 
    Pressure on gold came from the euro's sharp decline off a
2-1/2 year high against the dollar extended for a second day,
after European Central Bank chief Mario Draghi on Thursday 
threatened more monetary stimulus. 
    The macro environment continued to weigh down on gold this
week, as the ECB chief's comment led to a dollar rally, said
Christopher Louney, precious metals analyst at Barclays Capital.
    "Temporary bouts of strength have driven it above the $1,300
an ounce level several times recently, but we continue to think
the underlying fundamentals still point downwards," Louney said.
    Spot gold was down 0.1 percent at $1,287.51 an ounce
by 3:16 p.m. (1916 GMT). Solid support at its 100-day moving
average of $1,287 an ounce kept gold from falling further,
dealers said. 
    U.S. COMEX gold futures for June delivery settled
down 10 cents an ounce at $1,287.60, with trading volume in line
with its 30-day average, preliminary Reuters data showed.
    Gold was down 1 percent this week, after prices tumbled on
Wednesday after Fed Chair Janet Yellen said a high degree of
monetary accommodation was warranted given "considerable" slack
in the U.S. labor market and low inflation.
    Yellen's comment did not alter a consensus that the Fed will
start to raise interest rates around July 2015 after completely
unwinding its stimulus later this year.
    In the physical market, gold premiums in India, the world's
second-biggest bullion consumer, slipped this week as demand
eased on expectations of a relaxation in import curbs. 
    Silver eased 0.1 percent to $19.11.
    South African platinum producer Lonmin Plc is
preparing to restart operations next week after taking its
latest wage offer directly to striking miners. In addition, the
National Union of Mineworkers (NUM) said many of its workers
were returning to Anglo American Platinum's Rustenburg
operations that have been hit by a 15-week strike by the rival
AMCU union. 
    Platinum was down 0.4 percent to $1,426.75 an ounce,
while palladium fell 0.5 percent to $796.60.
    
3:16 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold JUN   1287.60  -0.10   0.0  1285.50 1294.50  101,703
US Silver MAY  19.077 -0.017  -0.1   19.020  19.200       55
US Plat JUL   1429.90  -8.20  -0.6  1426.60 1439.50    5,104
US Pall JUN    799.75  -4.30  -0.5   798.00  806.25    3,118
Gold          1287.51  -1.49  -0.1  1285.98 1294.40         
Silver         19.110 -0.020  -0.1   19.070  19.300
Platinum      1426.75  -5.65  -0.4  1426.50 1436.30
Palladium      796.60  -3.90  -0.5   799.50  804.25
TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold        133,481   132,582   179,861     14.93   -0.09
US Silver       32,172    64,035    55,927     22.31   -0.75
US Platinum      5,198     9,115    12,440     15.18   -0.33
US Palladium     3,458     5,839     5,721     23.89   -1.54

 (Editing by Susan Thomas and Dale Hudson)

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