* Gold falls after early rally to record near $1,250/oz
* Falling equities, commods trigger liquidation in gold
* Euro, stocks, industrial commods slip on debt concerns
* Coming up: U.S. April housing starts on Tuesday
(Adds details on COMEX open interest, U.S. Mint coin sales,
paragraphs 5, 11-13)
By Frank Tang
NEW YORK, May 14 (Reuters) - Gold ended flat on Friday
after an early rally to record highs fizzled, but the metal
posted its fourth straight weekly increase as jittery investors
fretted that a $1 trillion European rescue could be too late to
contain debt contagion.
Bullion prices jumped early in choppy trade, then dropped.
The slump deepened as investors sold gold to cover losses in
sliding equities, commodities and crude oil markets, traders
said.
"There is some margin-related selling in gold triggered by
losses in other assets. And the technical indicators are very
high, it's not surprising that we would have consolidation
today," said Bill O'Neill, partner of New Jersey-based
commodities firm LOGIC Advisors.
O'Neill cited a rise in the relative strength index for
gold's weakness. Gold's RSI rose to above 70 this week --
considered an overbought signal by technical analysts.
Sales of European and U.S. coins, bars and exchange-traded
gold funds surged this week, and open interest in COMEX futures
rose to an all-time high on Thursday.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic showing gold's relative strength index,
click:
http://link.reuters.com/zyq34k
For a graphic showing a change of COMEX gold open interest,
click:
http://link.reuters.com/ryr34k
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Spot gold <XAU=> fell as much as 2.4 percent from its
earlier record high of $1,248.95 an ounce, and was at $1,230.05
an ounce at 3:59 p.m. EDT (1959 GMT), down slightly from
$1,231.83 late in New York on Wednesday.
U.S. gold futures for June delivery <GCM0> on the COMEX
division of the New York Mercantile Exchange settled down $1.40
at $1,227.80.
Gold investors cashed in gains as U.S. stock markets fell
more than 2 percent, oil tumbled 4 percent and base metals fell
sharply. [] [] []
"There are losses being made in various places, and
potentially there is a need to lock in some profits to offset
some of the losses being created in commodities generally...
and in other sectors," said Saxo Bank senior manager Ole
Hansen.
"When you start to see other sectors start to give way as
we've seen here, that will have a natural spillover effect."
Gold's last foray above $1,200 an ounce in December was
quickly followed by a hefty correction. Prices dropped as much
as 5 percent the day after hitting a then-record $1,226.10.
Gold coin demand in Europe and the United States surged
this week, with the U.S. Mint on track to post its highest
monthly sales year to date for the popular American Eagles
coins.
On Friday, the U.S. Mint data showed American Eagle
one-ounce gold coins totaled 72,500 ounces so far in May,
exceeding 60,500 ounces in the entire month of April.
Physical gold products such as coins and bars are
traditionally a safe haven for anxious investors in times of
economic and geopolitical crises.
GOLD HOLDINGS AT RECORD HIGH
Investment interest in physical gold was strong, with
holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, at a record high
1,209.5 tonnes on Thursday.
The fund's reserves have risen 68.5 tonnes or 6 percent in
the last four weeks. The SPDR ETF is the world's sixth largest
holder of gold, ahead of Switzerland, China and Japan.
Safe-haven buying is seen continuing to buoy gold prices,
their current correction notwithstanding.
Silver <XAG=> tracked gold lower to $19.25 an ounce against
$19.41. Platinum <XPT=> was at $1,713.50 an ounce against
$1,731.50 and palladium <XPD=> at $525.50 against $537.
Close Change Pct 2009 YTD
Chg Close % Chg
US gold <GCM0> 1227.80 -1.4 -0.1 1096.20 12.0
US silver <SIN0> 19.225 -0.274 -1.4 16.845 14.1
US platinum <PLN0> 1715.40 -24.00 -1.4 1471.00 16.6
US palladium <PAM0> 527.90 -15.40 -2.8 408.85 29.1
Prices at 4:03 p.m. EDT (2003 GMT)
Gold <XAU=> 1229.70 -2.13 -0.2 1096.35 12.2
Silver <XAG=> 19.25 -0.16 -0.8 16.84 14.3
Platinum <XPT=> 1717.00 -14.50 -0.8 1465.50 17.2
Palladium <XPD=> 524.50 -12.500 -2.3 405.50 29.3
Gold Fix <XAUFIX=> 1236.50 -2.25 -0.2 1104 12.0
Silver Fix <XAGFIX=> 19.64 21.00 1.1 16.99 15.6
Platinum Fix <XPTFIX=> 1721.00 5.00 0.3 1466 17.4
Palladium Fix<XPDFIX=> 536.00 5.00 0.9 402 33.3
(Additional reporting by Jan Harvey in London; Editing by
David Gregorio)
