Gold drops on bright U.S. data; platinum posts weekly gain

New York  (May 17)  Gold fell on Friday as encouraging U.S. housing data weighed on its appeal as a hedge against economic weakness, while platinum notched its biggest weekly gain in a month and a half as strikes in South Africa continued.

Platinum was up almost 3 percent for the week, boosted by supply worries due to prolonged strikes in top producer South Africa, and palladium notched a weekly increase of 2 percent, also the best performance in six weeks.
The yellow metal came under pressure after government data showed U.S. housing starts jumped in April and building permits hit their highest level in nearly six years, offering hope the troubled housing market could be stabilizing.
Looking forward, a lack of U.S. economic indicators next
week could pressure gold and prompt bullion investors to focus
on the Federal Open Market Committee meeting on May 22, analysts
said.
    "The near-term sentiment for bullion appears uninspiring and
may act as a drag on prices given the lack of upcoming U.S.
economic data releases," said James Steel, chief precious metals
analyst at HSBC.
    Spot gold fell 0.3 percent to $1,292.06 an ounce by
3:22 p.m. EDT (1922 GMT). U.S. COMEX gold futures settled
down 20 cents at $1,293.40 an ounce.
    The metal eked out a 0.3 percent gain for the week on
earlier gains from political uncertainty in Ukraine that has
increased tensions between Russia and the West.
    Gold is often seen as an insurance investment against
financial or political troubles.
    Investor interest perked up as SPDR Gold Trust, the
world's biggest gold-backed exchange-traded fund, showed a
modest increase in flows. Holdings in the fund rose 1.79 tonnes
to 782.25 tonnes on Thursday - the first inflow in a month.

    Data showed that hedge fund Paulson & Co, the largest
institutional investor in SPDR, kept its stake in the fund
unchanged in the first quarter as bullion prices rebounded from
their biggest annual loss in 32 years in 2013.
    Platinum group metals were mixed as some investors took
profits after rallies earlier in the week driven by supply
worries amid the longest mining strike in South Africa.
    The stoppage has hit about 40 percent of global production
of the metal used for emissions-capping catalytic converters in
automobiles, with about 880,000 ounces lost to date, according
to Reuters calculations.
    Platinum was down 0.2 percent at $1,459.99 an ounce,
while palladium climbed 0.4 percent to $812.50 an ounce
but held near its 2-1/2-year peak of $827.50 set earlier in the
week.
    Spot silver fell 0.9 percent to $19.29 an ounce.