* Safe-haven fades after Egypt's Mubarak steps down
* Gold slips from earlier 3-week high near $1,370/oz
* Largest silver ETF posts first inflow since Jan. 24
* Coming up: U.S. retail sales due on Tuesday
(Adds details, volume and quotes)
By Frank Tang
NEW YORK, Feb 11 (Reuters) - Gold retreated below $1,360 an
ounce on Friday after the resignation of Egyptian President
Hosni Mubarak following weeks of protest took some heat out of
risk aversion.
Despite the decline, bullion posted its second consecutive
weekly gain as fears that Egypt's unrest would spread across
the Arab world had put a floor on gold prices, traders said.
Mubarak, the second Arab leader to be overthrown by a
popular uprising in a month, handed power to the army after 18
days of relentless rallies against poverty, corruption and
repression caused support from the armed forces to evaporate.
[]
"The geopolitical risk and the incentive to buy gold on the
back of that are probably reduced," said Hayden Atkins, an
analyst at Macquarie. "Tension will still be simmering, but it
won't be as big a news story for people to trade off."
Spot gold <XAU=> fell 0.4 percent to $1,357.95 an ounce by
2:52 p.m. EST (1952 GMT), having earlier risen to a three-week
high of $1,368.16. U.S. gold futures for April delivery <GCJ1>
settled down $2.1 at $1,360.4.
Futures trading volume was 40 percent below its 30-day
average, in line with lower turnover during the week. Some
traders said dwindling volume could signal waning investor
interest in gold.
Other market watchers, however, said gold remained well
supported by underlying safe-haven demand after Mubarak's
resignation and the Tunisian uprising that toppled President
Zine al-Abidine Ben Ali in January, starting a chain reaction
across the Arab world.
"The biggest question of course is if this (Mubarak's
stepping down) will lead to problems elsewhere. I think that's
what we need to focus on going forward, and that will keep gold
steady," said Bill O'Neill, partner at commodities firm LOGIC
Advisor.
Analysts said the metal had come under pressure from
slackening appetite for bullion as interest in other assets
such as stocks improved.
Gold was weakened further after data showed
stronger-than-expected U.S. consumer sentiment, which rose to
an eight-month high in early February. []
"Gold is encountering a lot of resistance on the upside as
the U.S. economy is improving, so there are less reasons to
hold gold," said Miguel Perez-Santalla, vice president of
Heraeus Precious Metals Management.
Bullion is having a tough time rising as the market has
already factored in investment interest out of fears of
economic uncertainty and inflation, Perez-Santalla said.
Gold fell 6 percent in January after a run of well-received
U.S. data and easing worries about Europe's debt crisis shifted
investor focus onto assets seen as higher-risk, but its slide
has been arrested this month.
ETF DEMAND STAYS SOFT
Investment demand for gold remained soft, with holdings of
the world's largest gold-backed exchange-traded fund, New
York's SPDR Gold Trust <GLD>, easing nearly a tonne on
Thursday. They are down just over 55 tonnes so far this year.
[]
In the same period of 2010, they fell around 27 tonnes.
"Consistent offloading by ETFs, who were pivotal in taking
the metal beyond $1,400, and lacklustre physical demand are the
key bearish forces curbing sustained gains," said Pradeep Unni,
senior analyst at Richcomm Global Services.
Premiums for gold bars were steady in Hong Kong and
Singapore, with no signs of buying interest from China after
the Lunar New Year celebration. There was hardly any physical
buying in Asia related to unrest in Egypt, dealers said.
<GOLD/ASIA1>
Silver <XAG=> slipped 0.8 percent to $29.96 an ounce.
The tightest physical supplies in four years have tipped
the U.S. silver futures market into backwardation this week,
making near-term prices more expensive than more distant
months. []
Holdings in the world's largest silver ETF, the iShares
Silver Trust <SLV>, rose around 18 tonnes to 10,388.45 tonnes
on Thursday, their first increase since Jan. 24.
[]
Platinum <XPT=> dropped 1.2 percent to $1,802.74 an ounce,
while palladium <XPD=> lost 1.1 percent to $811.47.
Prices at 2:53 p.m. EST (1953 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCJ1> 1360.40 -2.10 -0.2% -4.3%
US silver <SIH1> 29.995 -0.099 0.0% -3.0%
US platinum <PLJ1> 1813.50 -17.30 -0.9% 2.0%
US palladium <PAH1> 814.70 -6.20 -0.8% 1.4%
Gold <XAU=> 1358.05 -4.85 -0.4% -4.3%
Silver <XAG=> 29.96 -0.23 -0.8% -2.9%
Platinum <XPT=> 1802.74 -22.01 -1.2% 2.0%
Palladium <XPD=> 811.47 -8.78 -1.1% 1.5%
Gold Fix <XAUFIX=> 1364.00 5.00 0.4% -3.3%
Silver Fix <XAGFIX=> 30.00 20.00 0.7% -2.1%
Platinum Fix <XPTFIX=> 1829.00 1.00 0.1% 5.7%
Palladium Fix <XPDFIX=> 822.00 2.00 0.2% 3.9%
(Additional reporting by Jan Harvey in London; Editing by Dale
Hudson)
