PRECIOUS-Gold posts biggest weekly drop in five weeks
* Gold falls below 200-day moving average
* U.S. housing data, European bank repayment weigh
(New details throughout, changes byline, dateline, previously LONDON) NEW YORK, Jan 25 (Reuters) - Gold hit a two-week low on Friday, notching its biggest weekly drop this year as an improving global economic outlook sent the safe-haven metal below a key technical support. Bullion fell below its 200-day moving average, which it had held for the most part in the last five months, as U.S. equities measured by the S&P 500 rose for an eighth day for its longest winning streak in more than eight years. Friday's encouraging U.S. housing data and signs of stability in the euro zone pressured gold. Traders said next week's Federal Reserve policy meeting and U.S. employment data will likely set the tone for the gold market. "If next week's unemployment number comes in a little better than expected or even at expectation, that will put pressure on the market," said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC. Spot gold was down 0.6 percent at $1,658.11 an ounce Jan. 11 at $1,655.39 an ounce. The metal was 1.5 percent lower this week, its worst weekly performance since the week of Dec. 23. Gold priced in euros fell further, touching an eight-month low at 1,230.03 euros an ounce, as the single unit rallied on news banks will pay more cash than expected back to the European Central Bank in a sign that the banking system was stabilising. Gold also came under pressure after data showed sales of new U.S. single-family homes rose last year to the highest since 2009 despite a weak December, a sign the troubled U.S. housing market has turned a corner. U.S. COMEX gold futures for February delivery settled down $13.30 at $1,656.60 an ounce. Trading volume was about 10 percent above its 250-day average, preliminary Reuters data showed, partially boosted by February-April contract rollover ahead of February's first-notice day on Jan. 31. Silver, which tends to be more volatile than gold, dropped 1.5 percent to $31.16 an ounce.
PHYSICAL DEMAND IMPROVING Bullion buying from China and India, the world's two largest gold consumers, has dwindled after a brisk start in the first two weeks of January, dealers said. The price slump of the past few days, however, has triggered some physical buying interest, they said. Bullion investors now await next week's Fed Open Market Committee (FOMC) statement on Wednesday and nonfarm payrolls on Friday for more clues on U.S. monetary policy and the state of the world's largest economy. Among platinum group metals, platinum was up 0.8 percent at $1,691.50 for a nearly 1.5 percent weekly gain, extending its winning streak to a fourth week, its longest in a year. Spot palladium rose 1.9 percent to $737.72 an ounce.
1:55 PM EST LAST/ NET PCT LOW HIGH CURRENT SETTLE CHNG CHNG VOL US Gold FEB 1656.60 -13.30 -0.8 1655.00 1671.60 142,670 US Silver MAR 31.206 -0.516 -1.6 31.125 31.815 39,312 US Plat APR 1694.90 11.10 0.7 1675.00 1695.60 9,281 US Pall MAR 741.00 14.30 2.0 723.10 741.90 6,712Gold 1658.11 -9.25 -0.6 1655.39 1672.20 Silver 31.160 -0.470 -1.5 31.140 31.760 Platinum 1691.50 13.51 0.8 1677.50 1691.50 Palladium 737.72 13.75 1.9 725.50 739.00TOTAL MARKET VOLUME 30-D ATM VOLATILITY CURRENT 30D AVG 250D AVG CURRENT CHG US Gold 188,147 151,420 174,136 13.63 0.95 US Silver 42,250 42,524 53,317 19.91 0.00 US Platinum 9,440 15,747 10,839 16.96 -0.11 US Palladium 6,794 3,314 4,797
(Additional reporting by Clare Denina and Jan Harvey in London; editing by Sofina Mirza-Reid)