August 24, 2012 / 10:41 AM / 6 years ago

REFILE-PRECIOUS-Gold posts best week since January on stimulus hopes

(Corrects spelling of "its" in paragraph seven)
    * Gold takes breather after seven straight session gains
    * US stimulus hopes spark weekly rise
    * Platinum up 9 pct in August; S. Africa tensions simmer
    * Coming up: U.S. Dallas Fed manufacturing index Monday

    By Frank Tang
    NEW YORK, Aug 24 (Reuters) - Gold prices ended flat on
Friday as the market took a breather after surging to a
four-month high on Thursday on fresh hopes for a new round of
U.S. monetary stimulus.
    Platinum posted a second strong week of gains, up 5 percent,
and is up nearly 9 percent this month after an outbreak of
violence at a platinum mine in South Africa left 44 people dead.
The African nation supplies about 80 percent of the world's
    Bullion was up 3.4 percent on the week, its biggest weekly
gain since the last week of January, spurred by minutes of the
U.S. Federal Reserve's August meeting released Wednesday which
showed policymakers were ready to deliver more stimulus "fairly
soon" unless the economy improves considerably.
    A new round of quantitative easing -- printing money to buy
government bonds to keep long-term interest rates low -- fueled
fears of inflation further down the track. The first two rounds
of U.S. quantitative easing have fuelled a doubling of gold
prices in the last four years.
    The news lifted gold out of the near $100 range it had held
since mid-May and above its 200-day moving average for the first
time since March. However, gold's relative strength index
suggests the market might be slightly overbought following a
seven-session rally that was snapped on Friday.
    "Gold has this week broken out of its well-defined,
multimonth downward trendline. That resistance which kept gold
in a range in the last several months should become a new level
of support, suggesting gold is not going down but going higher,"
said Adam Sarhan, CEO of Sarhan Capital. 
    Spot gold was down 3 cents at $1,670.01 an ounce by
2:22 p.m. EDT (1822 GMT). It hit $1,674.80 on Thursday, its
highest price since April.
    U.S. gold futures for December delivery settled down
10 cents at $1,672.90 an ounce. Trading volume was about 35
percent below its 30-day average, preliminary Reuters data
    Holdings of gold exchange-traded funds, which
issue securities backed by physical metal, hit a record 71.253
million ounces, Reuters data showed on Friday.
    "The perception that the Fed is closer to QE than any time
since this time last year has helped drive gold higher. The
preservation-of-capital type money managers will likely find
gold more attractive now than they had any time in the past four
months when price had been stuck in a range," said Carlos
Perez-Santalla, trader at PVM Futures.
    Other precious metals retreated along with gold, with
platinum up 0.5 percent at $1,545.49 an ounce, off
Thursday's near four-month high of $1,558.49 an ounce.
    World No. 1 platinum producer Anglo American Platinum
 said on Friday 100 workers had refused to go
underground at its Thembelani mine in South Africa, a sign that
simmering discontent in the sector has not been contained.
    Silver was up 0.4 percent at $30.64 an ounce, while
spot palladium slid 0.2 percent to $648.47 an ounce.
 2:22 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold DEC   1672.90   0.10   0.0  1665.10 1676.30   91,486
 US Silver SEP  30.621  0.165   0.5   30.190  30.700   41,277
 US Plat OCT   1554.40  -0.50   0.0  1533.00 1555.50    7,917
 US Pall SEP    652.15  -4.45  -0.7   634.75  656.75    3,441
 Gold          1670.01  -0.03   0.0  1663.13 1673.31         
 Silver         30.640  0.130   0.4   30.260  30.720
 Platinum      1545.49   7.09   0.5  1531.00 1550.49
 Palladium      648.47  -1.13  -0.2   638.52  655.60
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold         96,159   150,193   181,060     18.01   -0.49
 US Silver       59,069    42,521    56,415     27.99    3.49
 US Platinum      8,419    13,915     9,620     23.21    0.26
 US Palladium     5,217     5,997     4,588                  

 (Additional reporting by, Jan Harvey and Charlotte East in
London; editing by Jim Marshall)
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