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PRECIOUS-Gold ends flat, down 3 percent for the week
March 16, 2012 / 11:27 AM / 6 years ago

PRECIOUS-Gold ends flat, down 3 percent for the week

 (Rewrites, updates comment, market activity, adds byline and
second dateline)	
 * Gold pressured by India raising import duties
 * Bullion posts second-biggest weekly drop, down 3 pct
 * Gold could fall below $1,600 before recovering
 * Coming up: U.S. housing starts on Tuesday
 By Frank Tang and Amanda Cooper	
 NEW YORK/LONDON, March 16 (Reuters) - Gold was largely
unchanged on Friday, but posted its second-biggest weekly
decline this year due to an early week drop after the Federal
Reserve withheld additional easing amid a string of encouraging
U.S. economic data.	
 The metal fell 1 percent earlier in the session after top
gold consumer India said it would double import duties on
  Oil's rally, the dollar's weakness and higher U.S. consumer
prices in February prompted gold investors to cover short
positions from earlier this week.	
 Some funds might have exited the gold trade after the S&P
500 stock index this week hit 1,400 for the first time in
four years after a strong run of U.S. job and manufacturing data
confirmed a decent pace of economic recovery.	
 The metal's 3 percent slide this week removed gains in
January based on expectations of further U.S. monetary easing.
The Fed offered few clues this week on any further action after
it said in late January it would keep rates near zero for the
next few years. 	
 With bullion now trading well below its long-term
technical support, gold could extend losses in the short term
before recovering, analysts said.   	
 "Every retracement within this bull trend (since 2001) has
managed to find a floor close to the 55-week average," said Tom
Fitzpatrick, analyst at CitiFX, Citigroup's technical research
 In the next few weeks, gold could test a low at $1,580 an
ounce, which could set the stage for another leg higher,
Fitzpatrick said.	
 Spot gold eased 0.1 percent at $1,656.54 an ounce by
2:53 p.m. EDT (1853 GMT).	
 U.S. April gold futures settled down $3.70 at
$1,657.50 an ounce. Volume was largely in line with its 30-day
average but lower than its previous session, preliminary Reuters
data showed.	
 U.S. inflation data for February showed consumer prices rose
by the most in 10 months as the cost of gasoline spiked, but
there was little sign that underlying inflation pressures were
building up. 	
 Also weighing on gold this week was a rise in 10-year U.S.
Treasury yields, a gauge for short-term U.S. interest rates,
which topped 2.3 percent, their biggest one-week rise since
early July 2011.	
 Silver is the only precious metal that ended higher for the
day, but it was down 4.5 percent for the week. The weekly
decline may have set the stage for even steeper losses with a
potential drop to $27.50 an ounce, analysts said. 	
 Barclays Capital technical analysts said silver had been in
the process of unwinding its oversold condition. But with
silver's break below $33.25. they said silver has reverted the
trend and is targeting $30 per ounce.  	
 Silver was up 0.2 percent on the day at $32.56 an
 Gold imports to India, the world's top importer, are likely
to fall significantly in 2012 as the government's decision to
double import duty to 4 percent is seen squeezing local demand,
especially for jewelry, industry officials said. 	
 Bombay Bullion Association President Prithviraj Kothari said
the increase would prompt a rise in smuggled gold and impact the
jewelry sector more than the investment sector. 
 "We will have to wait and see how (the import duty) works
but from the outlines we are seeing, it will be slightly bearish
for gold in the immediate future," MKS Finance head of trading
Afshin Nabavi said.	
 Platinum fell 0.6 percent to $1,670.24 an ounce, 
while palladium was down 0.5 percent on the day at
 2:53 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
             SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1655.80  -3.70  -0.2  1639.70 1664.90  146,090
 US Silver MAY  32.604 -0.122  -0.4   32.135  32.755   34,971
 US Plat APR   1675.50  -8.40  -0.5  1664.20 1693.20    5,215
 US Pall JUN    701.70  -8.20  -1.2   697.80  708.25    1,455
 Gold          1656.54  -1.19  -0.1  1640.18 1664.40         
 Silver         32.560  0.060   0.2   32.140  32.720
 Platinum      1670.24  -9.64  -0.6  1667.50 1690.00
 Palladium      697.22  -3.83  -0.5   698.98  704.72
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
             CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        176,376   185,194   193,964     19.54   -0.67
 US Silver       41,383    68,514    73,884      32.8   -0.38
 US Platinum      6,791     8,446     8,312     23.94    0.44
 US Palladium     1,459     5,348     4,684                  
 (Editing by Bob Burgdorfer)	

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