* Gold supported by technical buying, consumer sentiment
* Spot gold rebounds after touching 20-day MA
* SPDR gold ETF holdings hit record above 1,300 T
* Coming up: US May import, export prices on Tuesday
(Recasts, updates prices to market close, adds comment,
changes dateline, previous LONDON)
By Frank Tang
NEW YORK, June 11 (Reuters) - Gold rose toward $1,230 an
ounce on Friday, gaining for a third straight week, with
technical support and concerns over the economic recovery
firmly underpinning prices.
Dissipating worries about a European credit contagion and
equity market rallies earlier this week have taken some steam
out of the bullion market, traders said.
Gold is struggling to make significant headway after
hitting a record $1,251.20 an ounce on Tuesday, having fallen 1
percent on Thursday as risk appetite recovered and investors
worried the market had become overstretched.
"I think gold is going to struggle, provided we don't get
another bout of extreme risk aversion," said RBS Global Banking
& Markets analyst Daniel Major.
"We are going into the weakest period for jewelry offtake,
and high and volatile prices in local currencies are likely to
compound any seasonal weakness," he said. "From that point of
view, there is not going to be much support from the physical
market."
Spot gold <XAU=> was at $1,227.55 an ounce at 2:56 p.m. EDT
(1856 GMT), against $1,215.80 late in New York on Thursday.
U.S. gold futures for August delivery <GCQ0> settled up $8 at
$1,230.20.
Silver <XAG=> was at $18.22 an ounce versus $18.19,
platinum <XPT=> at $1,535 an ounce versus $1,534, and palladium
<XPD=> at $444 against $450.50.
The precious metal rose to session highs at above $1,230 an
ounce after U.S. retail sales data came in lower than expected,
pressuring stock markets.
Slightly weaker U.S. stocks on Friday lead to some
safe-haven demand in gold. [] Sharp falls in equity values
and the euro this year had benefited gold as an alternative
asset.
"Demand for gold as a safe haven and an alternative
currency remains, though maybe not in the heightened way it was
a few weeks ago," said Credit Agricole analyst Robin Bhar.
Strong investment demand continued. Holdings of the world's
largest gold-backed exchange-traded fund, New York's SPDR Gold
Trust <GLD>, rose 7.6 tonnes to a record 1,306.137 tonnes on
Thursday. []
"This trend shows that medium to long-term investors see
further risks on the horizon and view the lower gold price as
an opportunity to buy," said Commerzbank in a note.
TECHNICAL BUYING SUPPORTS
From a technical perspective, gold's consolidation is
likely to set it up for fresh gains in the medium term,
analysts said.
"Despite the recent weakness, we continue to see pullbacks
as counter trend and temporary ahead of a resumption of the
larger bulltrend," said Barclays Capital in a note.
Frank McGhee, head precious metals trader at Integrated
Brokerage Services in Chicago, said that gold's rise on Friday
was largely due to technical buying as prices quickly rebounded
after touching its 20-day moving average at $1,212.
However, he said that gold needed to hold at current levels
or risk "a quick and short-lived washout of about $40 to $50."
(Link to Reuters Insider video: http://link.reuters.com/bex39k)
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCQ0> 1230.20 8 0.7 1096.20 12.2
US silver <SIN0> 18.231 -0.120 -0.7 16.845 8.2
US platinum <PLN0> 1535.00 -1.20 -0.1 1471.00 4.4
US palladium <PAU0> 448.55 -0.75 -0.2 408.85 9.7
Prices at 3:03 p.m. EDT (1903 GMT)
Gold <XAU=> 1227.35 11.55 0.9 1096.35 11.9
Silver <XAG=> 18.22 0.03 0.2 16.84 8.2
Platinum <XPT=> 1534.50 0.50 0.0 1465.50 4.7
Palladium <XPD=> 444.00 -6.500 -1.4 405.50 9.5
Gold Fix <XAUFIX=> 1220.00 -0.50 0.0 1104 10.5
Silver Fix <XAGFIX=> 18.31 33.00 1.8 16.99 7.8
Platinum Fix <XAGFIX=> 1539.00 3.00 0.2 1466 5.0
Palladium Fix<XAGFIX=> 449.00 2.00 0.4 402 11.7
(Additional reporting by Jan Harvey in London; Editing by Lisa
Shumaker)
