Gold prices drop

New York (May 18) Gold fell on Friday as encouraging US 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 US 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 US 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.