February 7, 2013 / 11:41 AM / 5 years ago

PRECIOUS-Gold down in volatile trading on renewed euro fears

* Spot gold fails to breach 55-day moving average
    * ECB's Draghi highlights downside risk to euro zone
    * Platinum and palladium down after recent gains
    * Coming up: U.S. international trade data Friday

 (New update throughout, changes byline, dateline, previously
LONDON)
    By Frank Tang
    NEW YORK, Feb 7 (Reuters) - Gold fell in a volatile session
on Thursday after comments by European Central Bank (ECB)
President Mario Draghi ignited renewed economic fears over the
euro zone.
    The metal fell in tandem with U.S. equities and industrial
commodities on recession worries after Draghi's comments
triggered a nearly 1 percent drop in the euro against the
dollar.
    Draghi said that economic activity in the euro area should
gradually recover later in 2013 but there are more negative
risks than positive ones.  
    Technical selling accelerated gold's losses after the metal
failed to rise above its 55-day moving average, which gold has
failed to close above since late October.
    "It was up earlier but couldn't get through a resistance
level," said COMEX gold options floor trader Jonathan Jossen.
"There is no interest in gold."
    Spot gold fell 0.3 percent to $1,671.44 an ounce by
1:59 PM EST (1859 GMT), having earlier hit a session low of
$1,662.80 an ounce.
    U.S. gold futures for April delivery settled down
$7.50 at $1,671.30 an ounce, with trading volume in line with
its 250-day average, preliminary Reuters data showed.
    Also denting sentiment was news that top Federal Reserve
official Jeremy Stein, a member of the powerful Fed board of
governors, said that an extended period of low interest rates
could create risks to financial stability. 
    Physical gold demand also began to weaken ahead of the long
Lunar New Year break, with premiums for gold bars in Hong Kong
falling from last week's high.
    In fundamental news, China's gold production rose for a
sixth consecutive year to hit a record 403 tonnes in 2012,
keeping its ranking as the world's largest bullion producer, the
Shanghai Securities News said on Thursday. 
    Silver fell 1.1 percent to $31.46 an once.
   
    PLATINUM GROUP METALS RETREAT
    Platinum group metals, which are mostly used to make auto
catalytic converters, fell broadly on Thursday.
    The group had posted solid gains prior to this week's losses
on a more positive economic outlook and after mining disruptions
in South Africa, as well as a drop in supply from Russia.
 
    Analysts, however, say a short-term correction is likely,
considering strong speculative interest. 
    UBS analysts said in a note that any risk-off sentiment or
negative economic data would easily trigger an overdue pullback
given the heavy speculative net long positions.
    Platinum was down 0.8 percent to $1,719.74 an ounce,
retreating from a high of $1,740 on Wednesday, its strongest
since September 2011. 
    Palladium fell 1.2 percent to $751 an ounce. The
metal rose as high as $769.50 in the previous session, also its
peak since September 2011.

 1:59 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1671.30  -7.50  -0.4  1663.40 1683.90  169,676
 US Silver MAR  31.403 -0.474  -1.5   31.295  31.935   52,037
 US Plat APR   1722.30 -14.20  -0.8  1721.10 1743.00   10,425
 US Pall MAR    750.45 -14.35  -1.9   749.50  768.35    6,241
                                                               
 Gold          1671.44  -5.67  -0.3  1662.80 1682.90         
 Silver         31.460 -0.350  -1.1   31.320  31.890
 Platinum      1719.74 -13.00  -0.8  1723.00 1738.75
 Palladium      751.00  -9.50  -1.2   753.00  765.00
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        176,011   175,808   172,805     13.64   -0.01
 US Silver       60,623    44,350    51,604     20.43   -0.53
 US Platinum     10,614    17,279    11,006     17.21   -0.03
 US Palladium     7,006     4,435     4,731                  
                                                               
 
 (Reporting by Clara Denina in London; Editing by Bob
Burgdorfer)

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