SINGAPORE (Dow Jones)--Gold edged higher in Asian trading Friday, as China-led bargain-hunting lent support to the market after a sharp selloff earlier in the week.
Spot gold was trading at $1,719.60 a troy ounce at 0600 GMT, up 0.1% from its previous settlement but still 2.9% down since the start of the week.
Prices rose as investors continued to pick up cheaper metal following a fund-driven pullback Wednesday after comments from U.S. Federal Reserve Chairman Ben Bernanke damped hopes for further monetary easing measures. Despite strong investor interest following the selloff, gold is still trading 3.6% lower than its Wednesday open.
"Chinese investors are continuing to buy, [there is] a good buying opportunity at current price levels," a Beijing-based analyst said. She expects gold to trend higher next few weeks, due to sustained accommodative monetary policy in the U.S. and Europe and investor demand for safe stores of value amid persistent macroeconomic uncertainty in the euro zone.
Geopolitical tensions centering on Iran and Syria and a recent rally in oil prices are also underpinning prices above key support at $1,700/oz, she said.
Wing Fung Financial Group analyst Mark To, who is more bearish, said in a report that the end of the second European Central Bank long-term refinancing operation and the lack of fresh U.S. easing "will change the medium-term trend for gold."
Wing Fung maintains its recommendation that investors open a short trade at $1,730/oz, with a near-term target of $1,698/oz, he said.
Silver was the worst performer among precious metals, as investors remained cautious following extremely choppy trading in the last few days. It was trading at $35.35/oz, down 0.5% from its previous settlement.
The Beijing-based analyst said she expects gold to recover from Wednesday's selloff more quickly than silver as the grey metal's volatility continues to trouble investors.
Platinum rose 0.4% to trade at $1,704.25/oz, while palladium fell 0.2% to 714.70/oz.
Supply concerns are supporting platinum, after Impala Platinum Holdings Ltd. (IMP.JO) said Tuesday that it had lost 100,000 oz of output due to a strike at its Rustenburg mine in South Africa.
