London quotes for wholesale gold bars held above $1,560 per ounce Friday morning, cutting the week's losses to 1.9% as European stock markets reversed their earlier rally and the euro fell to a new two-year low.
Oil rose, but commodities headed for their fourth weekly loss in succession as Asian stock markets crept 0.1% higher from Thursday's near five-month low.
Silver bullion rose above $28.30 per ounce, recovering two-thirds of this week's 5.5% drop to Wednesday's low.
"[Mid-week] was bloodshed as panic and fear continue to dominate the market," said one Singapore dealer.
But "while Indian [physical] demand has been lower than normal, overall we continue to see decent buying interest from the rest of Asia," says today's note from Standard Bank in London, "especially South East Asia."
Premiums on gold bars traded in Tokyo rose Friday to $1.50 per ounce above the world's benchmark price – set by quotes for London delivery – "as investors turned from sellers to buyers," says Reuters.
Gold bar premiums in Hong Kong and Singapore "were steady from last week," says the newswire.
US gold futures in contrast – where speculators have cut their bullish exposure by two-thirds from August 2011's record – will cost less in margin down payments starting next Wednesday, the CME trading exchange said yesterday.
The second cut to margin requirements since February, the CME's move cuts the initial margin required to open a 100-ounce gold future to $9,113 – some 5.8% of the June contract's current value, and down by one-fifth from the record margin requirement reached last summer.
"Margin reductions tend to have a less immediate impact on prices than margin hikes," says ANZ Bank's commodity desk in a note.
"Nevertheless, the reduction is likely to be mildly supportive going forward."
In exchange-traded funds, Thursday saw the $68 billion SPDR Gold Trust add 2 tonnes to the bullion holdings needed to back its shares.
Some 3.8% below its record holding of June 2010, the SPDR remained 12 tonnes lighter for the week at 1270 tonnes.
"Gold's direction seems to be driven more by the level of market risk aversion and the Euro currently," says Anne-Laure Tremblay at BNP Paribas, quoted by Reuters.
"Market sentiment on gold is fragile at the moment. A shift to a more accommodative monetary policy stance may be needed to sustain a gold bull rally."