By Carole Vaporean NEW YORK (Reuters) - Gold posted moderate gains in late Friday business on an afternoon rally in U.S. equity markets as investors viewed recent efforts by the Federal Reserve to add liquidity as supportive. But trading was exceptionally quiet with many participants remaining on a long holiday weekend following Thursday's U.S. Thanksgiving Day holiday. Spot gold was quoted at $817.65/821.65 an ounce at 2:15 p.m. EST (7:15 p.m. British time), down from $814.60 an ounce in late Thursday business. Traders said terror attacks in Mumbai also underpinned gold as a safe-haven purchase. "We're seeing a little bit of strength because of the horrible situation that's occurring in Mumbai," said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC in Chicago. "At the same time, we've had a continuation of the rally we had in the stocks. We had a little bit of light trading, some thin volatility, but overall we've held fairly well and put a few dollars on the board," he added. Over last few weeks when stock markets lost a significant amount of ground, all asset classes, including gold and other precious metals positions, were liquidated for cash. "For most of the last two to three weeks gold has been trading almost lock-step with stocks, and we won't return to their disconnect until we can see if the (stock) rally actually does hold and we see a base," said McGhee. Chartists noted that gold has managed to form a short-term base around the $810 level, which held on Friday and will be watched to see if it continues to lend support. Looking ahead, some traders said they thought gold's prospects remained positive as the market awaited the outcome of OPEC's production meeting this weekend and a spate of U.S. economic data. Next week's readings include data on manufacturing, jobs, and auto sectors. Earlier this week, an announcement by the Federal Reserve outlining an $800 billion lending facility supported consumer debt securities and was in turn helping gold. [nN28447081] The precious metal is heading for its biggest monthly gain in nine years as investors, spooked by the outlook for the global economy, are also buying the metal as a safe haven. Prices have climbed some $90 an ounce, or 12 percent, this month. Gold is also up 12 percent in euro terms, and 15 percent in terms of the Australian dollar. "Investment (in gold) is strong because there is huge concern over the economic and financial environment, both in the short and possibly the longer term," RBS Global Banking & Markets metals strategist Stephen Briggs said. "The measures being taken to stabilise the situation may lead to inflationary fears down the road, so gold has a double benefit from that." Gold is typically seen as a hedge against inflation. Dresdner Kleinwort said on Friday it expects gold prices to average $870 an ounce this year, falling to $740 an ounce in 2009. For silver, it forecasts an average price of $15 an ounce in 2008 and $9.75 next year. But Wolfgang Wrzesniok-Rossbach, head of sales at Heraeus, said delegates at a forum on Thursday organized by the precious metals group expected gold prices to hit new highs next year. "Consensus was that in the long run all the bailouts we are seeing, whether in the car industry, the banking industry or others ... will (create) inflation, and that would be positive for gold," he said. Among other precious metals, spot platinum was quoted at $871 an ounce, up from $853 late on Thursday. Palladium was at $186.50 an ounce against $187.50. Silver was lower at $10.25 an ounce against $10.31. Industrial precious metals have suffered more than gold from the economic downturn. Platinum and palladium, which are chiefly used in autocatalytic converters, have both dropped significantly from their summer highs.

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