* Gold ends down over 4 percent on the week
* Platinum, palladium recover from multi-month lows
* Risk sentiment improves, funds rotate positions
(Recasts, updates prices and adds analyst comments NEW YORK
dateline, byline)
By Chris Kelly and Jan Harvey
NEW YORK/LONDON, May 21 (Reuters) - Gold ended down for the
fifth straight day on Friday, suffering its worst weekly
performance in almost 15 months, as improved demand for
"riskier" assets dampened its safe-haven demand bid.
Platinum and palladium recovered sharply from losses that
took them to 3-1/2 month lows, but still ran their biggest
weekly percentage loss since late 2008, amid hefty fund
liquidation.
Spot gold <XAU=> was bid at $1,177.35 an ounce at 1842 GMT,
against $1,181.10 late in New York on Thursday. U.S. gold
futures for June delivery <GCM0> on the COMEX division of the
New York Mercantile Exchange shed $12.50 to settle at $1,176.10
an ounce, after dealing in $1,166 to $1,188 session range.
"It's no longer just a safe-haven," said George Gero, Vice
President with RBC Capital Markets Global Futures in New York.
"You have got two different tug-of-war plays here ...
you've got a trillion dollar bailout on two continents that
eventually could be inflationary, and then in the short-run,
you have the tighten-your-belt lack of demand pulling it
down."
Platinum <XPT=> was at $1,500.50 an ounce against $1,509,
after earlier falling around 15 percent from last Friday's
level. Palladium <XPD=> was at $433.75 versus $412.75, after
falling to $393, down 25 percent on the week.
"Risk aversion and fears of contagion have weighed on the
PGMs alongside the rest of commodities complex," analyst Suki
Cooper at Barclays said, but added that from a fundamental
point of view there has been positive news flow.
"Johnson Matthey painted a picture where we had platinum
closer to balance in 2010 compared to 2009 and they did
highlight they expect a surplus in palladium smaller than last
year as well," she said.
In its closely watched Platinum 2010 report, platinum
refiner and specialist Johnson Matthey Plc <JMAT.L> said it
expects demand to strengthen as global auto production recovers
this year and again in 2011.
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For stories on Platinum Week in London, click on:
[]
For a story on platinum and palladium heading for their
biggest one-week percentage drop since October 2008,
click on: []
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Gold prices recovered from an earlier low of $1,166.50 an
ounce, down more than 5 percent from last Friday. Traders say
prices are due a period of consolidation after rising 6 percent
in the first two weeks of May to record highs at $1,248.95 an
ounce.
"We traded up from $1,125 to the high at $1,248 not even in
a month, so it is quite normal that you have a movement against
that," said Commerzbank trader Michael Kempinski.
"There is really too much investor money in there, and the
funds are not all interested in the long term performance."
SOVEREIGN DEBT FEARS EBB
Fear has been a driving force in the market due to the euro
zone's handling of its sovereign debt problems, but that
premium seemed to erode in recent sessions as investors shifted
back into risk.
"You saw gold performing a lot better over the past couple
days then you did PGMs and silver," said one precious metals
dealer.
"What you have now is people, who were going to gold as a
safe-haven, are kind of getting out of it and getting back into
everything else," he said, pointing to strong gains in
platinum, palladium and copper.
The euro <EUR=> clung to gains against the dollar as fears
of currency intervention rose, but oil prices remained
depressed, falling below $70 a barrel. [] []
Investment demand for physical gold continued to be firm.
Holdings of the world's largest gold-backed exchange-traded
fund, New York's SPDR Gold Trust <GLD>, hit a record 1,220.152
tonnes on Thursday. []
Silver <XAG=> was bid at $17.57 an ounce against $17.59.
(Additional reporting by Humeyra Pamuk, Editing by Marguerita
Choy)
