* Stabilizing commodities reduce safe-haven bids in gold
* Euro steadies vs. dollar as Ireland package eyed
* China lifts bank requirements, pressures commodities
* Coming up: CFTC Commitment of Traders report
(Recasts, updates comments, market activity, changes byline,
moves dateline from LONDON)
By Frank Tang
NEW YORK, Nov 19 (Reuters) - Gold prices were little
changed on Friday as the euro bounced on growing confidence
that Ireland's debt crisis will be resolved, but China's
measures to tighten its economy kept bullion under pressure.
Bullion fell for a second consecutive week as the metal was
caught up in broad-based selling, along with other commodities,
by investors' need to liquidate positions amid increasing
margin calls.
A financial aid plan to help Ireland cope with its battered
banks will be unveiled next week, European Union sources said
on Friday, but experts warned a rescue may not be enough to
prevent contagion to other euro zone members. []
"The sense of calm that has returned today and yesterday is
taking away any safe-haven bid that may have emanated from the
potential crisis," said Tom Pawlicki, a precious metals and
energy analyst of MF Global.
At the same time, speculation about a possible interest
rate hike by China, a top raw materials consumer, is likely to
continue to weigh on gold and other commodities.
A decision by China on Friday to raise banks' required
reserve ratios may not have been expected in the commodities
markets, but many investors had factored in some form of
government action to sap excess liquidity. []
Spot gold <XAU=> was up 0.1 percent at $1,353.50 an ounce
at 2:13 p.m. EDT (1913 GMT), having earlier fallen as low as
$1,341.40. U.S. gold futures for December delivery <GCZ0>
settled down 70 cents at $1,352.30.
Silver <XAG=> rose 1.3 percent to $27.27 an ounce.
COMEX volume continued to be lighter than earlier this
week, when the markets sold off. Gold futures volume was more
than 20 percent below its 30-day average, while silver turnover
was largely in line with its average.
The gold market stabilized as the euro inched higher
against the dollar.
Hopes that Ireland was near a deal to get tens of billions
of euros from its European partners and the International
Monetary Fund helped push the euro above $1.37 overnight, but
momentum stalled ahead of resistance around $1.3750. []
"The European situation will continue to play up, which
should support metals," said Saxo Bank analyst Ole Hansen.
MF Global's Pawlicki said CME Group's <CME.O> decision to
raise the margins to trade soy, sugar, rice and several other
agricultural commodity contracts dented buying sentiment.
[]
Silver, gold and other precious metals sold off recently
after similar margin increases by the exchange triggered heavy
liquidation, Pawlicki said.
Expectations that the dollar will weaken once more is still
underpinning longer-term positive sentiment towards gold,
analysts said.
"With the Fed continuing to vouch for QE2, dollar weakness
will continue to persist, and, along with that, a possible
solution to the Irish debt crisis has resulted in a firmer
euro," said Richcomm Global Services analyst Pradeep Unni.
"These two factors will continue to provide a bullish bias
to the metal in the near term."
COMMODITIES UNDER PRESSURE
Oil, base metals and other commodities were under pressure
on Friday, with the Reuters/Jefferies CRB index <.CRB> losing
about 2 percent for the week as news China was lifting banks'
reserve requirements refocused attention on the prospect of a
rate hike in the world's biggest consumer of many metals.
China said it would raise banks' reserve requirements by 50
basis points on Nov. 29. Commodity prices tumbled this week on
fears the government would lift rates after inflation hit a
25-month high in October. []
But demand for gold-backed exchange-traded funds continued
to be soft, with holdings of the world's largest gold ETF, the
SPDR Gold Trust <GLD.P>, declining 4.6 tonnes to a one-month
low of 1,286.299 tonnes on Thursday. []
Platinum, mostly consumed by the auto industry to clean
vehicles' exhaust fumes, was in focus after prominent
commodities investor and hedge fund manager Dwight Anderson
said the metal's output has possibly peaked, and prices are
likely to rise to record highs.
"I actually don't believe in the geological math that
supports the thesis of peak oil," the founder of the Ospraie
hedge fund said at the ETF Securities investor conference in
New York on Thursday.
"But, where platinum is concerned, peak production, I
think, has already occurred," Anderson. []
Platinum <XPT=> edged up 0.2 percent to $1,664.49 an ounce
and palladium <XPD=> gained 1.1 percent to $701.
Prices at 2:36 p.m. EST (1936 GMT)
LAST/ NET PCT YTD
CLOSE CHG CHG CHG
US gold <GCZ0> 1352.30 -0.70 -0.1% 23.4%
US silver <SIZ0> 27.179 0.345 0.0% 61.3%
US platinum <PLF1> 1671.10 7.20 0.4% 13.6%
US palladium <PAZ0> 703.70 8.20 1.2% 72.1%
Gold <XAU=> 1352.65 0.00 0.0% 23.4%
Silver <XAG=> 27.30 0.38 1.4% 62.1%
Platinum <XPT=> 1665.49 3.49 0.2% 13.6%
Palladium <XPD=> 700.72 7.00 1.0% 72.8%
Gold Fix <XAUFIX=> 1342.50 -15.00 -1.1% 21.6%
Silver Fix <XAGFIX=> 27.07 50.00 1.9% 59.3%
Platinum Fix <XPTFIX=> 1650.00 15.00 0.9% 12.6%
Palladium Fix <XPDFIX=> 695.00 6.00 0.9% 72.9%
(Additional reporting by Jan Harvey in London; Editing by
Walter Bagley)
