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Gold prices heads for 2nd weekly rise, PGMs off 17-month peak

Feb 08 2013, 11:21 IST
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SummaryGold hit a low of $1,667.64 an ounce before rebounding to $1,671.31.

Gold regained its footing on Friday after falling in the previous session as the euro weakened on concerns over the health of the euro zone economy.

Platinum and palladium, which have more industrial applications than gold, dropped from their strongest levels in more than a year.

Bargain hunting and firmer equities helped lift gold prices although thin trade ahead of the Lunar New Year exaggerated movements, with investors also factoring in China's better-than-expected trade data for January.

Gold hit a low of $1,667.64 an ounce before rebounding to $1,671.31, steady from the previous session. Gold, which is heading for its second straight weekly rise, ended up around 7 percent in 2012 - the 12th straight year of gains, making it one of the longest bull runs ever for a commodity.

"For gold, the technical picture comes into place. I think we are at a crossroad where the uptrend since May is actually meeting the downtrend from September-October," said Dominic Schnider, an analyst at UBS Wealth Management in Singapore.

"So from that angle, it's very important that we continue to see the uptrend being confirmed."

U.S. gold futures were also steady at $1,672.10 an ounce.

Platinum and palladium extended losses, having rallied to their highest level since September 2011 earlier this week on hopes of a better economic outlook.

The two metals, which are used in jewellery and auto catalysts, have gained, before the recent losses, on a more positive economic outlook and after mining disruptions in South Africa, as well as a drop in supply from Russia.

Platinum faces a resistance at $1,777 per ounce, and may retrace into a range of $1,620-$1,650 over the next four weeks, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.

In other markets, shares edged up after China's trade data for January handily beat forecasts to underscore a recovery trend, while the euro hovered near a two-week low after European Central Bank's chief cited downside risks to the bloc's economy.

A firmer dollar weighs on gold prices by making the metal more expensive for holders of other currencies.

China's economic rebound was evident as the first hard economic numbers of the year, released on Friday, showed a surge in exports and imports that was not solely explained by the timing of the Lunar New Year holiday.

"There's pre-holiday buying in Hong Kong and China which has pushed up the gold price a little bit. But it's pretty quiet on our side," said

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