* U.S. retail sales data beats expectations
* Platinum prices rebound from lowest since July 2009 (Updates market activities)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Nov 14 (Reuters) - Gold surged 2.5 percent on Friday to just shy of $1,200 an ounce as short-covering, fund buying and a sudden weakening of the dollar offset better-than-expected U.S. data that diminished demand for safe-haven metals.
Bullion bolted more than $40 to a two-week high at $1,193.34 in New York after dropping more than 1 percent in early trade to test the $1,145 level, where strong support was seen twice in the last four sessions, triggering pre-weekend short covering.
The 10 a.m. EST (1500 GMT) spike was conspicuous in size and volume, with 25,000 lots traded in just ten minutes, and nearly half of the day’s December contract volume changing hands in just over 30 minutes.
“The early morning pressure was met with significant bargain-hunting, and when the market was unable to continue its move lower, short-covering ensued,” David Meger, director of metals trading at Vision Financial Markets.
Gold tumbled early after the Commerce Department said U.S. retail sales rose 0.5 percent in October, a sign American consumers were spending with more gusto and could help keep the economy growing at a brisk pace.
At 2:42 p.m. EST (1942 GMT), spot gold was up 2.5 percent at $1,190.60 an ounce, a sharp rise from a low of $1,146.64 after the report.
U.S. gold futures for December delivery settled up $24.10 at $1,185.60 an ounce, with trading volume about 60 percent above the 30-day average, preliminary Reuters data showed.
The dramatic gains put gold on track for one of its best days in months and up more than 1 percent for the week, its second straight increase.
Still gold’s long-term appeal is still in doubt. The U.S. economy is outpacing others, and investors are betting interest rates there will rise faster. Rising rates weigh on gold as they lift the opportunity cost of holding non-yielding assets.
Investors pulled another 2 tonnes from the world’s top gold-backed exchange-traded fund, SPDR Gold Shares, in its eighth straight daily outflow, taking holdings to a six-year low of 720.62 tonnes.
Silver was up 4.4 percent at $16.28 an ounce, while spot palladium edged down 0.2 percent to $764.72 an ounce.
Platinum climbed 1.5 percent to $1,209.49 an ounce, having earlier touched a five-year low at $1,171.10.
3:22 PM EST LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL US Gold DEC 1185.60 24.10 2.1 1146.00 1192.90 274,898 US Silver DEC 16.314 0.693 4.4 15.250 16.380 78,014 US Plat JAN 1213.10 14.10 1.2 1177.50 1216.50 16,508 US Pall DEC 771.35 0.50 0.1 751.50 773.90 6,302 Gold 1190.60 29.02 2.5 1147.26 1193.34 Silver 16.280 0.680 4.4 15.300 16.400 Platinum 1209.49 17.78 1.5 1180.00 1214.00 Palladium 764.72 -1.26 -0.2 754.00 771.15 TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHNG US Gold 310,823 194,739 159,690 20.27 0.79 US Silver 87,995 53,584 51,139 28.43 -0.92 US Platinum 17,028 9,524 12,687 18.85 -0.74 US Palladium 8,257 5,335 5,913 27.88 0.42 (Additional reporting by Josephine Mason in New York, A. Ananthalakshmi in Singapore; Editing by David Evans, Lisa Von Ahn and Marguerita Choy)