February 10, 2012 / 4:05 AM / 7 years ago

PRECIOUS-Gold falls as Greek bailout talks stall

* Broad-based risk aversion on euro worries pressures
equities, gold
    * Bullion posts first two-week loss since early December
    * Gold holds key support on weekly charts, seen bullish
    * Coming up: U.S. retail sales Tuesday

 (New throughout, updates prices and market activity; adds link
to graphic)	
    By Frank Tang and Jan Harvey	
    NEW YORK/LONDON, Feb 10 (Reuters) - Gold fell 
on Friday, following losses in the euro and U.S. equities,
as uncertainty over negotiations for a bailout package for
Greece prompted investors to sell the metal and hoard cash.	
    Bullion posted a second straight weekly loss, as a lack of
concrete steps to avert a ruinous Greek default more than offset
a rally earlier this week fueled by the U.S. Federal Reserve's
long-term outlook for near-zero interest rates.	
    Technical support lifted gold off a two-week low hit during
he session, but scenes from a workers' strike in Greece and the
government's failure so far to reach a decision on accepting the
bailout pressured financial markets across the board.	
    "In a situation where the financial system may be at risk,
people may need a lot of cash to buffer themselves against a
potential shock such as a Greek default," said Bart Melek, head
of commodity strategy at TD Securities.	
    "They may swap out gold along with other assets for cash,"
Melek said.	
    Spot gold fell 0.9 percent to $1,715.99 an ounce as
of 2:49 p.m. EST (1949 GMT), having hit a low of $1,703.69.	
    U.S. gold futures for April delivery settled down
$15.90 an ounce at $1,725.30. Trading volume was largely in line
with its 30-day average and set to be the highest this week.	
    Gold's losses were limited as liquidity improved a day after
the biggest operator of U.S. futures exchanges, CME Group
, lowered trading margins for a range of commodities
contracts including gold, silver and platinum. 	
    Risk aversion drove down equity markets and industrial
commodities such as crude oil and copper, as investors favored
safe-haven U.S. Treasuries, sending the dollar higher against
the euro.   	
    "Today, the market is in risk-off mood again with stock
markets weaker as well," said Alex Zumpfe, a trader at Heraeus
precious metals house. "Gold is facing some selling pressure
after support levels didn't trigger sufficient buying interest.	
    Gold looks vulnerable to a correction after rising nearly 10
percent so far this year, particularly on possible negative
headlines related to the euro zone debt crisis, analysts said.	
    Bullion notched a 0.5 percent loss for the week, its first
consecutive weekly decline since early December, and Friday's
decline extended the metal's losses to a third straight day.	
    CitiFX said gold's outlook remains bullish as it held above
support at its 55-week moving average, September 2011 low and
long-term channel base. A breach above $1,802 an ounce could
suggest a rally to record $2,070, it said.	
    Citigroup's technical research unit said silver could
outperform gold. It cited a possible near-term breakout for the
white metal.	
    The bullion market largely ignored news Indonesia could ban
exports of some raw materials, including gold and silver, from
2014. Indonesia was the world's seventh-largest gold producer
last year. 	
    Silver was down 1.2 percent at $33.46 an ounce. Spot
platinum was down 99 cents at $1,651 an ounce, while spot
palladium fell 1.3 percent to $697.35.	
 2:49 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1725.30 -15.90  -0.9  1706.40 1737.20  162,773
 US Silver MAR  33.604 -0.313  -0.9   33.170  34.060   44,709
 US Plat APR   1659.80  -7.80  -0.5  1631.80 1663.40    6,594
 US Pall MAR    703.05  -8.25  -1.2   694.60  711.10    3,176
 Gold          1715.99 -15.01  -0.9  1705.15 1734.35         
 Silver         33.460 -0.420  -1.2   33.220  34.030
 Platinum      1651.00  -0.99  -0.1  1635.00 1657.00
 Palladium      697.35  -9.40  -1.3   697.00  709.00
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        172,313   189,194   193,041     20.98   -0.11
 US Silver       54,334    43,597    41,898     33.94   -1.88
 US Platinum      6,941     7,134     7,425        19    0.00
 US Palladium     3,347     4,042     4,784                  
 (Additional reporting by Veronica Brown in London; Editing by
David Gregorio)
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