RTRS:PRECIOUS-Gold extends gains, but heads for third week of losses
* Gold to test resistance at $1,671 -technicals
* Coming Up: U.S. Consumer prices Feb; 1230 GMT
(Updates prices, adds quotes)
By Lewa Pardomuan
SINGAPORE, March 16 (Reuters) - Gold extended gains on Friday as
bargain-hunters took advantage of a cheaper U.S. dollar, but prices were heading
for a third straight week of losses as a brightening economic outlook in the
United States prompted investors to park their money elsewhere.
Gold fell to $1,655.04 an ounce in early trade before rebounding to
$1,661.09 an ounce by 0633 GMT, up $3.36. The precious metal hit a low of
$1,634.09 on Wednesday, its weakest since Jan. 16, on fading expectations of
more monetary easing in the United States, which reduce the money available to
buy safe-haven assets.
"There's little need for a safe haven at the moment," said Lynette Tan, an
analyst with Phillip Futures in Singapore. "Going forward, we could see gold
maintain at this level, or even fall to about $1,620. I think gold will be
sidelined at the moment compared to the other risk assets."
Bullion, which was heading for its longest weekly losing streak since early
October, struck a record of around $1,920 last September on fears the euro debt
crisis could stall global growth.
U.S. April gold added $2.20 an ounce to $1,661.70 an ounce.
In theory, a stronger dollar makes commodities priced in the U.S. currency
more expensive for holders of other currencies.
The dollar took a breather on Friday after investors booked profits on
recent gains, but dealers said the uptrend could resume after the latest U.S.
data showed further evidence supporting the view that the recovery in the
world's biggest economy was becoming more self-sustaining.
"Gold still appears to be taking a hit and, if it is to escape the downward
trend in the short term, it will have to overcome the price resistance at
$1,726 per ounce," said Heraeus in a report. "Only then will it begin moving up
again."
Dealers awaited the release of the U.S. CFTC commitment of traders weekly
data at 1930 GMT, which reflects investors' sentiment on gold. Net long futures
positions held by speculators fell 20 percent in the week up to March 6, the
biggest drop since August 2010.
Platinum was still at a premium to gold because of supply worries.
A month-long stoppage at the world's second-largest producer Impala Platinum's
largest facility is expected to cost nearly 200,000 ounces in
production and would probably cut deliveries in April by as much as half.
A quiet physical market indicated jewellers and investors appeared unsure
about the future of bullion prices which have fallen about 7 percent since late
February.
"The market is almost dead. Buying interest has vanished into the thin air
although there's some offtake from Indonesia and Thailand. It's very very
small," said a physical dealer in Singapore.
"Others are asking for cheap goods and quick delivery. The faster you
deliver the gold, the better."
Among equities, the Nikkei gained for the fourth straight session on
Friday, supported by buying of cyclical shares on a brightening outlook for the
U.S. economy, which offset profit-taking in exporters that have rallied recently
on the softer yen.
