* Gold pressured on speculation Mubarak may step down soon
* Rising dollar adds pressure to gold prices
* Coming up: Reuters/UMichigan sentiment data Friday
(Recasts, updates prices, market activity; new byline, changes
dateline, previously LONDON)
By Frank Tang
NEW YORK, Feb 10 (Reuters) - Gold fell on Thursday as the
dollar rose after encouraging U.S. job data, and as safe-haven
demand faded as investors expected Egyptian President Hosni
Mubarak to step down, even though that development failed to
materialize.
Mubarak provoked rage on Egypt's streets when he said he
would hand powers to his deputy but disappointed protesters who
had been expecting him to step down after two weeks of unrest.
[]
"Gold is just struggling. It appears that the tension in
Egypt has eased a bit, so maybe that's why the price of gold
has come off," said Bruce Dunn, vice president at bullion
dealer Auramet.
"If you didn't have the Egyptian crisis, gold would be
below $1,300. Even with the Egyptian crisis, we were trading at
$1,310 (in late January) and barely holding onto those levels,"
he said.
Spot gold <XAU=> dropped 0.2 percent to $1,360.05 an ounce
by 3:17 p.m. EST (2017 GMT).
U.S. gold futures for April delivery <GCJ1> settled $3 down
at $1,362.50.
Futures trading volume was nearly half its 30-day average,
in line with weaker turnover in the past several sessions. Some
traders said dwindling volume could signal waning investor
interest in gold.
Bullion's appeal as a currency hedge faded as the dollar
<.DXY> rose after after data showed new U.S. applications for
unemployment benefits dropped to a 2-1/2-year low last week.
[] []
Gold has fluctuated between $1,340 and $1,370 this week,
awaiting direction, while Asian consumer buying has been light
following the Lunar New Year holidays.
There have been few incentives to buy gold lately, given
improving appetite for riskier assets and rising bond yields.
Still, few investors seem prepared to sell heavily.
INVESTMENT DEMAND LAGS
The world's largest gold exchange-traded fund, New York's
SPDR Gold Trust <GLD>, reported a small outflow on Wednesday,
signaling investment remained lackluster. []
"Since the beginning of the year we have seen outflows from
the ETFs. We have seen lower risk aversion day by day, and
today the stronger dollar seems to be also taking its toll,"
said Commerzbank analyst Eugen Weinberg.
"We are still very bullish in the longer term and believe
new all-time highs are very possible towards the end of the
year. But at the moment, gold seems to not be the favorite.
During economic recovery, other metals are in stronger demand,"
he said.
In India, the world's largest consumer of physical gold,
demand remained soft as buyers awaited fresh price falls.
Dealers said suppliers hiked premiums charged on London prices
to $2.20-$2.50 as availability was limited by supply issues
after heavy snowfalls in refining areas. []
Demand in number two consumer China was also muted after
the Lunar New Year holiday. Although the festival officially
ended on Wednesday, most buyers in China are not expected to
return to the market until Monday, dealers said.
Silver <XAG=> slipped 0.3 percent to $30.08 an ounce.
Platinum group metals retreated after rising to multi-year
highs in the previous session.
Platinum <XPT=> dropped 1.8 percent to $1,820.75 an ounce,
while palladium <XPD=> lost 1.3 percent to $815.72.
Platinum reached its highest in 2-1/2 years on Wednesday
and palladium a 10-year peak, amid expectations that rising car
demand would lift consumption of the autocatalyst metals.
Supply issues were also supportive, analysts said.
Prices at 3:17 p.m. EST (2017 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1362.50 -3.00 -0.2% -4.1%
US silver <SIH1> 30.094 -0.182 0.0% -2.7%
US platinum <PLJ1> 1830.80 -28.60 -1.5% 3.0%
US palladium <PAH1> 820.90 -5.55 -0.7% 2.2%
Gold <XAU=> 1360.05 -2.84 -0.2% -4.2%
Silver <XAG=> 30.07 -0.10 -0.3% -2.6%
Platinum <XPT=> 1821.99 -31.50 -1.7% 3.1%
Palladium <XPD=> 815.72 -10.75 -1.3% 2.0%
Gold Fix <XAUFIX=> 1353.25 -5.50 -0.4% -4.0%
Silver Fix <XAGFIX=> 29.80 -42.00 -1.4% -2.7%
Platinum Fix <XPTFIX=> 1831.00 3.00 0.2% 5.8%
Palladium Fix <XPDFIX=> 822.00 4.00 0.5% 3.9%
(Additional reporting by Jan Harvey and Amanda Cooper; Editing
by David Gregorio)
