(Recasts, updates with quotes, closing prices, changes
dateline, pvs LONDON)
* Gold momentum slows after three-day rise; dollar sapped
* China calls for super-sovereign reserve currency
* Volatility could rise next week on thin holiday volume
By Frank Tang
NEW YORK, June 26 (Reuters) - Gold futures ended slightly
higher on Friday, losing some of their initial upward momentum
based on a broadly weaker dollar, and the metal could continue
to be rangebound because of weakened investment demand.
The price of gold has largely moved in a broad range
between $920 and $940 this week, as the combination of the
resurgent dollar and easing inflation worries put a damper on
bullion's rise.
Analysts said that the recent encouraging U.S. data had
hampered gold's rise, as the danger of fresh crises in
financial markets appeared less imminent.
"One of the reasons gold has been bought has been as an
insurance premium against inflation, or against systemic risk
from another camp of investors," said Peter Fertig, an analyst
with Quantitative Commodity Research. "At least for the latter
group, their need to hold gold has clearly been reduced."
U.S. August futures <GCQ9> settled up $1.50 at $941 an
ounce on the COMEX division of the New York Mercantile
Exchange.
Spot bullion <XAU=> was at $940.60 by 2:25 p.m. EDT (1825
GMT), up from $938.55 quoted late on Thursday in New York.
Earlier in the session, it hit a two-week high above $948.20
per ounce -- last seen June 12, when the dollar tumbled against
a basket of currencies.
Data released earlier showed U.S. consumers were slowly
regaining confidence in their economy [] and
personal income rose more than expected in the past month.
NEW RESERVE CURRENCY?
Gold could receive a shot in the arm as China and some
other central banks recently indicated they would consider to
diversify their reserves into a basket of major currencies out
of the dollar.
China's central bank renewed its call on Friday for the
creation of a super-sovereign reserve currency to reduce the
dollar's global domination. []
On Thursday, the head of the economic department of China's
Communist Party policy research office said the country should
buy more gold, and that purchasing land in the United States
was a better option for China than buying U.S. treasuries.
[]
However, market watchers said it was unlikely that the
dollar's world reserve currency status would be challenged in
the foreseeable future.
Inflows into gold-backed exchange-traded funds waned,
reflecting weak fundamental demand for gold from retail
investors and the jewelry market.
Holdings at the world's largest gold-backed exchange-traded
fund, SPDR Gold Trust <GLD>, fell 0.5 percent to 1,125.74
tonnes as of June 25, down 5.5 tonnes from the previous
business day. []
On the supply side, South Africa's Gold Fields Limited
<GFIJ.J> expected to beat guidance and increase production by 4
percent in the fourth quarter of 2009. []
For next week, the metal should see less liquidity and more
short-term volatility because of thinner volume related to the
U.S. Independence Day and Canada Day holidays, said George
Gero, vice president of RBC Capital Markets Global Futures.
In other precious metals, spot silver <XAG=> firmed to
$14.12, against $14.01 quoted late in New York on Wednesday,
while platinum <XPT=> climbed to $1,199, against $1,184.50 and
palladium <XPD=> strengthened to $244.50 from $242.00.
Close Change Pct 2008 YTD
Chg Close Pct Chg
US gold <GCQ9> 941.00 1.50 0.2 884.30 6.4
US silver <SIN9> 14.128 0.123 0.9 11.295 25.1
US platinum <PLN9> 1203.00 12.00 1.0 941.50 27.8
US palladium <PAU9> 247.20 2.75 1.1 188.70 31.0
Prices at 2:25 p.m. EDT (1825 GMT)
Gold <XAU=> 940.60 2.05 0.2 878.200 7.1
Silver <XAG=> 14.12 0.11 0.8 11.30 25.0
Platinum <XPT=> 1199.00 14.50 1.2 924.50 29.7
Palladium <XPD=> 244.50 2.50 1.0 184.50 32.5
Gold Fix <XAUFIX=> 942.00 4.75 0.5 836.50 12.6
Silver Fix <XAGFIX=> 14.260 0.000 0.0 14.760 -3.4
Platinum Fix <XPTFIX=> 1203.00 0.00 0.0 1529.00 -21.3
Palladium Fix <XPDFIX=> 245.00 0.00 0.0 365.00 -32.9
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Prices in dollars per ounce.
2008 close for U.S. gold second contract month, U.S. silver and
palladium third contract months and U.S. platinum fourth
contract month.
(Additional reporting by Chikako Mogi in Tokyo; Editing by
Christian Wiessner)
