LONDON, Aug 12 (Reuters) - Gold prices fell on Friday,
extending the previous session's retreat from record highs as
fresh strength in equity markets and gains in the euro versus
the safe-haven Swiss franc pointed to sharper appetite for risk.
Spot gold was down 1.7 percent at $1,735.64 an ounce
at 1340 GMT. It is still on track for its best weekly
performance since November 2009, however, and has risen 22
percent so far this year on a potent mix of concerns over U.S.
and euro zone debt levels and economic growth.
The precious metal hit a record $1,813.79 an ounce early on
Thursday. Investors remain jittery over the outlook for the U.S.
economy, which could eventually spark a fresh rally in gold,
analysts said.
"Near term, a correction makes sense in relation to other
safe havens," said Macquarie analyst Hayden Atkins. "Gold has
traded in lockstep with U.S. government debt in particular. As
Treasuries have risen, gold has basically gone the same way."
"The question is, if people are more concerned about the
sovereign risks around the United States, added into the
problems elsewhere, will that relationship break down?
"That is what you would need for the gold price to go higher
-- for people to be reflecting their concerns more in gold than
in safe havens in general."
Gold hit a session low of $1,734.90 an ounce after Wall
Street stocks rose at the open after data showed U.S. retail
sales posted their biggest gain since March last month.
A rebound in stock markets in recent days has diverted some
investment from gold.
The world's largest gold-backed exchange-traded fund, New
York's SPDR Gold Trust , reported its biggest one-day
outflow since Jan. 25 on Thursday, with its holdings declining
by 23.6 tonnes, worth some $1.3 billion at current prices.
"Some ETF investors clearly view the recent gold's sharp
price rally as exaggerated and have taken profits as financial
markets calm," said Commerzbank in a note.
OUT IN FORCE
But overall risk-averse buyers have been out in force this
week, putting gold on track for its biggest one-week rise in
nearly two years, up 4.4 percent.
In the week ended Aug. 10, two of the largest gold ETFs,
SPDR and the iShares Gold Trust , had their fourth-biggest
week of net inflows, data from Lipper showed on Thursday.
On the physical market, robust investment demand in Asia
helped gold premiums in Hong Kong and Singapore remain steady.
"The gold market remains underpinned by the movement to
physical gold, which has persisted all week," said UBS in a
note. "European demand for small bars particularly, but also
coins, remains very strong. As the week has progressed Asian
physical demand, outside India, has been noticeably higher.
"We have also observed among existing and indeed new clients
this week a growing preference towards allocated gold instead of
metal account/unallocated gold. This is quite obvious among our
wealth management and private clients, but even among the fund
industry, interest in allocated gold is growing again.
"The move to real assets such as gold in physical form
signifies the heightened state of risk aversion at present."
While investment remains high, relatively little gold scrap
is being returned to the market, with much readily available
metal already having been sold.
Among other precious metals, silver was down 0.5
percent at $38.51 an ounce.
The gold:silver ratio, or the number of ounces of silver
needed to buy an ounce of gold, held near 46 on Friday, close to
its highest since early February, as silver underperformed gold.
Meanwhile, spot platinum was up 0.7 percent at
$1,795.20 an ounce, while spot palladium was up 0.7
percent at $743 an ounce.
Platinum prices edged back above those of gold after the two
metals reached parity for the first time since late 2008 early
this week, but gold may still regain its premium over platinum
if risk aversion rises once more, lifting gold as a safe-haven
and weighing on platinum as an industrial metal.
Sources : http://www.reuters.com/article/2011/08/12/markets-precious-idUSL6E7JC0A920110812
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