Gold dropped on Friday as the dollar rallied and after an apparently unfounded television report about an announcement from Egypt sparked more speculation President Hosni Mubarak could be stepping down. But gold remains on track for its first weekly gain in 2011 after US employment rose far less than expected in January, and after Federal Reserve Chairman Ben Bernanke indicated easy monetary policy would stay in the near term.
Tom Pawlicki, precious metals and energy analyst at MF Global, said gold should benefit as a safe haven on fears that unrest in Egypt would spread across the Middle East despite rumours that Mubarak could resign. Traders said the rumour seemed to stem from a brief report on US television station CNBC, but more than two hours later there was no news on Egyptian TV about any announcements or possible transition of power. There were no reports from other media outlets suggesting any imminent news from Egypt.
Spot gold dropped 0.3 percent to $1,348.59 an ounce by 2:30 pm EST (1930 GMT). US gold futures for April delivery fell $3.90 to $1,349.10. Silver gained 0.1 percent to $28.94 an ounce. Holdings of the largest silver ETF, the iShares Silver Trust, fell more than 30 tonnes to their lowest since November on Thursday.
Platinum group metals touched multi-year highs, with platinum reaching its loftiest level since July 2008 at $1,858.50 an ounce and palladium a 10-year peak at $831. Platinum was later up 0.3 percent at $1,841.24 and palladium down 0.3 percent at $814.47.
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