PRECIOUS-Gold closes flat after recovering on Wall St rally

Tue Apr 17, 2012 7:20pm GMT
 

* US equities rally lifts gold off initial lows
    * Results from Goldman, other firms fuel risk appetite
    * Gold looks vulnerable with lower highs on charts
    * Coming up: U.S. Mortgage Index Wednesday

 (Recasts, adds details, updates market activity)	
    By Frank Tang and Jan Harvey	
    NEW YORK/LONDON, April 17 (Reuters) - Gold ended nearly flat
o n T uesday after a Wall Street rally lifted the metal off lows
hit earlier in the session, halting a two-day bullion drop
brought about by euro-zone debt jitters. 	
    Bullion, which has tended recently to follow equities, rose
nearly $20 from its morning low after a slew of encouraging U.S.
corporate results led by Goldman Sachs Group Inc's 
fuelled a 200-point jump in the Dow.	
    The metal lost 2 percent in the prior two sessions as
markets broadly weakened on worries that Spain, one of the euro
zone's largest economies, might soon struggle to repay its debt.	
    Renewed European debt fears, however, could boost gold's
safe-haven appeal and break the positive link between the metal
and riskier assets, analysts said.	
    "We expect that if European credit conditions continue to
deteriorate, gold (along with the dollar) could start to better
reflect the growing tensions by moving higher," said Edward
Meir, metals analyst at INTL FCStone.	
    Spot gold was off 0.1 percent at $1,650.75 an ounce
by 2:37 p.m. EST (1837 GMT), recovering from the early low at
$1,634.44.	
    U.S. gold futures for June delivery settled up $1.40
at $1,651.10 an ounce. Trading volume was weak for a second day
at about 30 percent below its 30-day average, preliminary
Reuters data showed.	
    "Gold has been unable to make a new interim high since the
autumn of last year, with each new high being progressively
lower than the previous one," investor and analyst Dennis
Gartman said in a note.	
    Gold looks technically vulnerable. Its price is well below
the 50-day moving average, which had defined the metal's bull
run since early 2010, and a break below $1,625 an ounce could
spark a sell-off, he said.	
    While concerns about chaotic defaults among peripheral euro
zone economies supported gold as a safe haven last year, a
brighter U.S. economic outlook and diminished hopes of further
U.S. monetary easing have recently pressured the metal.	
    	
    PHYSICAL DEMAND LAGGING	
    Physical gold demand has softened a touch this year from
last year's levels. American Eagle gold coin sales from the U.S.
Mint fell 30 percent in the first quarter, and demand in India,
historically the world's biggest gold consumer, has been light.	
    India's central bank cut interest rates on Tuesday for the
first time in three years by an unexpectedly sharp 50 basis
points. If this stimulates economic growth, it is likely to
prompt more gold buying.	
    Among other precious metals, silver was up 0.8
percent at $31.69 an ounce, spot platinum climbed 0.8
percent at $1,581.49 an ounce and spot palladium rose 1.6
percent to $658.72 an ounce.	
 2:37 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT 
               SETTLE   CHNG  CHNG                       VOL 
 US Gold JUN   1651.10   1.40   0.1  1635.20 1658.40  129,718 
 US Silver MAY  31.674  0.301   1.0   31.305  31.910   38,648 
 US Plat JUL   1584.70   8.90   0.6  1565.60 1588.00    5,570 
 US Pall JUN    661.95  11.25   1.7   644.80  663.75    2,387 
 
 Gold          1650.75  -0.85  -0.1  1635.48 1657.10         
 Silver         31.690  0.240   0.8   31.350  31.880 
 Platinum      1581.49  12.49   0.8  1567.40 1581.74 
 Palladium      658.72  10.32   1.6   645.50  660.25 
 
 TOTAL MARKET              VOLUME          30-D ATM
 VOLATILITY
               CURRENT   30D AVG  250D AVG   CURRENT     CHG 
 US Gold        135,775   198,190   197,139     18.19    1.09 
 US Silver       50,723    52,337    60,471     27.93   -0.15 
 US Platinum      5,585    10,390     8,412     19.92    0.05 
 US Palladium     2,407     3,570     4,685                  
 
 	
 (Additional reporting by Amanda Cooper in London; Editing by
Dale Hudson and Alden Bentley)
 
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