* Crude oil rally, short covering help boost gold
* Gold set for over 2 pct weekly loss on dashed QE hopes
* Some hedge funds reduced gold stake as momentum fades
(Rewrites, updates comment, market activity, adds NY dateline,
changes byline)
By Frank Tang and Michelle Martin
NEW YORK/LONDON, April 5 (Reuters) – Gold rose on Thursday,
as investors covered short positions after a sharp two-day
pullback, and a crude oil rally also buoyed the precious metal
that sank early this week when investors grew pessimistic about
further U.S. monetary easing.
Bullion rebounded from its biggest two-day drop in a month
after it steadied above key technical resistance at $1,600 an
ounce where investors had placed heavy put options to protect
against further losses.
Trading volume was thin ahead of Friday’s U.S. nonfarm
payrolls report and the Good Friday holiday in Western markets.
Gold remained on track for a weekly decline exceeding 2 percent
after minutes of the latest Federal Reserve policy meeting
doused hopes for further U.S. monetary stimulus.
Market watchers said some hedge funds might have reduced
gold holdings due to stronger U.S. economic data and easing of
fears about European debt.
“A lot of the gold trade by hedge funds was specifically
tied to a new round of Fed stimulus,” said Jeffrey Sica, chief
investment officer of SICA Wealth Management with more than $1
billion in assets.
“If there is any perception that momentum in gold will
taper, hedge funds will take the opportunity to sell. Gold is
always vulnerable because of how well it has done,” he said.
Spot gold was up 0.6 percent at $1,628.21 an ounce by
1:47 p.m. EDT (1747 GMT).
Gold briefly broke back above $1,630 an ounce as a drop in
U.S. weekly initial jobless claims pulled the dollar from its
highs and stocks from their lows, but was unable to sustain the
move.
U.S. gold futures for June delivery settled up 1
percent at $1,630.10 an ounce, with trading volume about halved
of its 30-day average, preliminary Reuters data showed.
Among other precious metals, spot silver was up 1.3
at $31.72 an ounce, spot platinum edged up 0.2 percent at
$1,595.94 an ounce, and spot palladium gained 1.8 percent
at $640.70 an ounce.
1:47 PM EDT LAST/ NET PCT LOW HIGH CURRENT
SETTLE CHNG CHNG VOL
US Gold JUN 1630.10 16.00 1.0 1620.70 1634.80 104,165
US Silver MAY 31.73 0.686 2.2 31.175 31.810 35,720
US Plat JUL 1607.60 9.00 0.6 1590.20 1611.20 7,147
US Pall JUN 644.80 12.05 1.9 629.90 646.00 3,059
Gold 1628.21 8.96 0.6 1620.63 1633.06
Silver 31.720 0.400 1.3 31.240 31.800
Platinum 1595.94 3.39 0.2 1590.00 1604.99
Palladium 640.70 11.25 1.8 631.75 643.25
TOTAL MARKET VOLUME 30-D ATM VOLATILITY
CURRENT 30D AVG 250D AVG CURRENT CHG
US Gold 115,253 202,949 196,995 18.72 -0.46
US Silver 42,735 62,099 60,020 31.42 3.56
US Platinum 7,234 10,929 8,408 19 0.00
US Palladium 3,066 4,904 4,678
(Editing by David Gregorio)
