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PRECIOUS-Gold drops on bright U.S. data; platinum posts weekly gain
May 16, 2014 / 10:42 AM / 4 years ago

PRECIOUS-Gold drops on bright U.S. data; platinum posts weekly gain

* Encouraging U.S. housing data pressures gold
    * Gold posts for 0.3 percent weekly increase
    * Platinum ends week 3 percent higher
    * Coming up: U.S. existing home sales Wednesday

 (Adds comment, second byline, dateline, updates market
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, May 16 (Reuters) - Gold fell on Friday as
encouraging U.S. housing data weighed on its appeal as a hedge
against economic weakness, while platinum notched its biggest
weekly gain in a month and a half as strikes in South Africa
    Platinum was up almost 3 percent for the week,
boosted by supply worries due to prolonged strikes in top
producer South Africa, and palladium notched a weekly
increase of 2 percent, also the best performance in six weeks.
    The yellow metal came under pressure after government data
showed U.S. housing starts jumped in April and building permits
hit their highest level in nearly six years, offering hope the
troubled housing market could be stabilizing. 
    Looking forward, a lack of U.S. economic indicators next
week could pressure gold and prompt bullion investors to focus
on the Federal Open Market Committee meeting on May 22, analysts
    "The near-term sentiment for bullion appears uninspiring and
may act as a drag on prices given the lack of upcoming U.S.
economic data releases," said James Steel, chief precious metals
analyst at HSBC.
    Spot gold fell 0.3 percent to $1,292.06 an ounce by
3:22 p.m. EDT (1922 GMT). U.S. COMEX gold futures settled
down 20 cents at $1,293.40 an ounce.
    The metal eked out a 0.3 percent gain for the week on
earlier gains from political uncertainty in Ukraine that has
increased tensions between Russia and the West.
    Gold is often seen as an insurance investment against
financial or political troubles.
    Investor interest perked up as SPDR Gold Trust, the
world's biggest gold-backed exchange-traded fund, showed a
modest increase in flows. Holdings in the fund rose 1.79 tonnes
to 782.25 tonnes on Thursday - the first inflow in a month.
    Data showed that hedge fund Paulson & Co, the largest
institutional investor in SPDR, kept its stake in the fund
unchanged in the first quarter as bullion prices rebounded from
their biggest annual loss in 32 years in 2013. 
    Platinum group metals were mixed as some investors took
profits after rallies earlier in the week driven by supply
worries amid the longest mining strike in South Africa.
    The stoppage has hit about 40 percent of global production
of the metal used for emissions-capping catalytic converters in
automobiles, with about 880,000 ounces lost to date, according
to Reuters calculations.
    Platinum was down 0.2 percent at $1,459.99 an ounce,
while palladium climbed 0.4 percent to $812.50 an ounce
but held near its 2-1/2-year peak of $827.50 set earlier in the
    Spot silver fell 0.9 percent to $19.29 an ounce.
3:22 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
               SETTLE   CHNG  CHNG                       VOL
US Gold JUN   1293.40  -0.20   0.0  1287.70 1298.30  102,152
US Silver MAY  19.292 -0.155  -0.8   19.295  19.455       62
US Plat JUL   1466.10  -3.80  -0.3  1461.20 1476.50    8,306
US Pall JUN    815.00   2.90   0.4   805.00  818.05    4,623
Gold          1292.06  -3.94  -0.3  1288.00 1298.15         
Silver         19.290 -0.170  -0.9   19.280  19.510
Platinum      1459.99  -3.01  -0.2  1461.00 1471.80
Palladium      812.50   3.50   0.4   807.50  816.00
               CURRENT   30D AVG  250D AVG   CURRENT     CHG
US Gold        126,092   138,793   179,722      14.5   -0.16
US Silver       33,373    56,299    55,695      21.5   -0.37
US Platinum      8,495     9,830    12,517     17.69    0.76
US Palladium     6,116     5,854     5,827      23.9   -0.72

 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Jason Neely, David Evans and Lisa shumaker)

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