* Precious metal up 1 pct on the day after another choppy
session
* For the week, gold still down 1 pct due losses through Wed
(Updates market activity, U.S. prices; adds new byline; NEW
YORK dateline from LONDON)
By Barani Krishnan
NEW YORK, May 25 (Reuters) – Gold prices edged higher on
Friday after another day of choppy trading but the shiny metal
still finished the week lower after broad commodities selling
earlier in the week due in part to a strong dollar.
Gold’s globally traded spot contract and New York’s most
active futures each rose about 1 percent for the session as
investors and traders pared bearish bets ahead of Monday’s
Memorial Day holiday, which made for a longer weekend in the
United States.
Earlier in the day, gold came under pressure after a plea
for help from Spain’s wealthy Catalonia region. That plea forced
then euro, already battered by Greece’s woes, to a new 22-month
low versus the dollar.
As the session progressed, the precious metal recovered.
“There was a little bit of book squaring up ahead of the
weekend,” said Bill O’Neill, an investor in gold and partner at
LOGIC Advisors in Upper Saddle River, New Jersey.
“Three days of headlines is something you really don’t want
to be involved with,” O’Neill said, referring to the period that
the gold futures market on New York’s COMEX would be closed
before it reopens Tuesday.
Traders have been reviewing their positions across U.S.
markets in the run-up to Memorial Day, many unwilling to put on
excessively “short”, or bearish, calls should the situation in
Greece or the euro zone improve considerably before Tuesday.
In Friday’s session, COMEX’s most-active gold futures
contract, June, settled at $1,568.90, up 0.7 percent on
the day.
On a weekly basis, however, June gold fell 1.2 percent due
to losses during the first three days of the week, particularly
on Wednesday when almost every commodity plunged.
Spot gold hovered at just under $1,572 an ounce, up 1
percent on the day and down 1.3 percent on the week.
“The $1,540 level held intact yet again earlier this week,
and even though there is no overwhelming physical support, or
indeed investor interest, these levels are starting to look
attractive, with some modest buying on the lows,” Andrey
Kryuchenkov, analyst at Moscow’s VTB Capital, said.
In the physical market for gold, buying interest from main
consumer India remained light, while gold bar premiums in Hong
Kong and Singapore held steady.
Premiums of gold bars in Tokyo, however, rose to as much as
$1.50 an ounce above London prices, the highest since last
March, as investors turned from sellers to buyers during a
recent price downturn, dealers said.
In other trading news, CME Group Inc, the world’s
largest commodities exchange, on Thursday cut margins for
trading gold and some other contracts, with effect from the
close of business on May 29. Margins for trading gold have been
lowered by about 21 percent this year.
“Margin reductions tend to have a less immediate impact on
prices than margin hikes,” ANZ Bank said in a note.
“Nevertheless, the reduction is likely to be mildly supportive
going forward.”
Among other precious metals, silver was up about 1
percent at more than $28 an ounce.
Spot platinum also rose about 1 percent to around
$1,428 an ounce. Platinum has underperformed gold recently, with
the gold/platinum ratio – which measures the number of platinum
ounces needed to buy an ounce of gold – rising to its highest
since the end of January at 1.1.
Spot palladium climbed nearly half a percent to above
$585 an ounce.
(Additional reporting by Jan Harvey in London; Editing by Bob
Burgdorfer)
