* Gold drops for 5th straight day after topping $1,000
* Margin calls on stock market trigger gold selling
* SPDR Gold ETF sees small inflow to record levels
(Recasts, updates prices, market activity to close; adds
second byline, dateline; previously LONDON)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, Feb 27 (Reuters) - Gold ended slightly
lower in choppy trade on Friday, falling for a fifth straight
session after bullion rose above $1,000 last week, as investors
opted to sell the metal amid volatile stock markets.
Position squaring ahead of the weekend discouraged heavy
buying of gold. Meanwhile, margin calls on the declining stock
market forced some investors to sell the yellow metal to cover
losses on Wall Street, traders said.
"The stock market is getting hurt, so investors have to
sell gold," said Jonathan Jossen, a COMEX floor trader.
Spot gold <XAU=> was at $936.10 an ounce at 2:11 p.m. EST
(1911 GMT), down 0.9 percent from its last quote $944.70 in New
York late Thursday. It touched a low of $926.75 an ounce.
U.S. gold futures for April delivery <GCJ9> settled down 10
cents at $942.50 an ounce on the COMEX division of the New York
Mercantile Exchange.
In early sessions, bullion was supported by safe-haven bids
amid more uncertainty seen over the fate of major U.S. banks
after the government took a large common equity stake in
embattled lender Citigroup <C.N>.
Gold futures rose as much as 2 percent after news that the
U.S. economy contracted at its sharpest rate since early 1982
in the fourth quarter. U.S. GDP shrank at a revised annual
rate of 6.2 percent in the fourth quarter. []
"Worse-than-expected GDP data shows the depths to which the
economy has sunk," said Calyon metals analyst Robin Bhar. "In a
worsening economic environment, and a worsening financial
environment, gold really will come into its own."
Strong inflows into gold-backed exchange-traded funds have
stalled, sending gold prices down 6 percent this week after
they hit an 11-month high above $1,000 an ounce last Friday.
Holdings of the world's largest gold ETF, New York's SPDR
Gold Trust <GLD>, were static for much of the week, recording
only a small 0.31-tonne inflow on Thursday. []
"This is not going to be enough to support sentiment in the
gold market, which has now corrected by about 6 percent from
its recent highs," said UBS strategist John Reade in a note.
"(It) will probably continue to decline, at least while the
performance of equities and other risk assets remains less
dreadful than of late," he added.
LACKLUSTER ETF INFLOW
As investment flows stalled, the lack of buying in the
jewelry sector -- which accounted for 58 percent of global
demand last year, according to the World Gold Council --
weighed on prices.
India has not imported any gold in February as high prices
dampened demand. In the same month last year it imported 23
tonnes of the metal. []
Among other precious metals, spot silver <XAG=> was at
$13.01 an ounce, down 0.7 percent from its Thursday finish of
$13.10.
Spot platinum <XPT=> was at $1,065.50 an ounce, up 1.5
percent from its previous close $1,050, while spot palladium
<XPD=> was last at $193.00, down 0.5 percent from its late
Thursday New York quote of $194.
(Reporting by Frank Tang and Jan Harvey; Editing by David
Gregorio)
