By: Reuters
Gold steadied on Friday as the dollar slipped against the euro on worries the U.S. retail sales for February could show a drop in consumer spending, denting prospects of a sustainable economic recovery.
Bullion price has lost more than 7 percent since powering to a lifetime high above 1,200 an ounce in December last year and is heading for a weekly decline of more than 2 percent -- its biggest weekly drop since mid-January.
Silver, platinum and palladium -- also regarded as industrial metals -- extended losses after being hit by fund selling following the release of strong consumer inflation data from China that triggered worries about monetary tightening.
Spot gold [XAU= 1111.55 2.25 (+0.2%) ] hit an intraday high of $1,111.40 an ounce and was at $1,109.30 by 0237 GMT, unchanged New York's notional close on Thursday, when it hit a low of around $1,100, its weakest since Jan. 25.
Bullion hovered below the 100-day moving average but was well above the 300-day moving average around $1,000, with dealers expecting the metal's safe-haven appeal to remain intact amid fears over sovereign debt issues in euro zone economies.
"We are above the 300-day moving average. I think there is still a chance for gold to continue to move higher in the days and weeks ahead," said Darren Heathcote, head of trading at Investec Australia in Sydney. "The correlation with gold and euro may return. Obviously it temporarily broke down when gold sold off yet the euro went higher. I think as the dollar weakens, we should see gold start to move ahead again."
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 108.60 0.13 (+0.12%) ], said its holdings stood at 1,115.511 tons as of March 11, unchanged from the previous business day.
U.S. gold futures for April delivery [GCJ0 Unavailable () ] rose $1 an ounce to $1,109.2 after ending slightly higher on Thursday despite worries that possible monetary tightening by China could weigh on bullion.
"The market is absolutely dead if you look at the volumes. I think we are still consolidating and prices will be stuck in a range," said a bullion dealer in Hong Kong. "I would say sentiment is neutral for gold, while the upside for platinum and palladium is rather limited," he added.
Platinum [XPT 20.85 0.06 (+0.29%) ] group metals have gained on the prospects of steady demand for autocatalysts as the global economy recovers and rising investment demand after the launch of platinum- and palladium-backed exchange-traded products in New York earlier this year by a U.S. subsidiary of London's ETF Securities.
The world's largest silver-backed exchange-traded fund, the iShares Silver Trust [SLV 16.81 0.15 (+0.9%) ], said its holdings fell 48.82 tonnes from the previous business day to 9,302.58 tons as of March 11.
Platinum was at $1,606 an ounce against $1,592. Silver was at $17.10 an ounce [SIC1 17.165 0.029 (+0.17%) ] against $16.97.
