SINGAPORE, March 2 (Reuters) - Gold edged higher on
Friday as buyers slowly returned to the market, lured by
Wednesday's plunge of 5 percent, although bullion is still
looking at its worst week since December.	
    U.S. Federal Reserve Chairman Ben Bernanke's lack of a
reference to further quantitative easing at congressional
testimony on Wednesday sparked a heavy sell-off in bullion,
sending the metal to a one-month low short of $1,700.
 	
    Gold's fall to the lower end of its previous range showed
the lack of conviction required to push prices above $1,800 or
higher, but analysts and traders saw Wednesday's plunge as a
healthy correction rather than the end of the bull run.	
    "The broader macro backdrop remains gold-favourable, given
the negative interest rate environment, longer-term inflationary
concerns and lingering sovereign debt uncertainties," Barclays
Capital said in a research note.	
    But it added dollar strength, broad risk reduction and
profit-taking could pose near-term hurdles for gold. 	
    Spot gold inched up 0.2 percent to $1,720.09 an ounce
by 0334 GMT, on course for a weekly decline of 3.4 percent, its
biggest one-week fall since mid-December.	
    U.S. gold was little changed at $1,721.50.	
    Technical analysis suggested that spot gold could face
resistance at $1,726 during the day, said Reuters market analyst
Wang Tao. 
    Holdings in gold-backed exchange-traded funds gained 238,674
ounces to a record high of 70.76 million ounces, suggesting
investors remained keen on gold. 	
    	
    	
    	
    GOLD-PLATINUM SPREAD COLLAPSES TOWARDS PARITY	
    The gold-platinum spread fell to just above $16 an ounce,
its lowest since mid-September, as supply disruption in South
Africa remains a concern, and upbeat U.S. auto sales data
helped. 	
    Spot platinum gained half a percent to $35.30 an
ounce, headed for a loss of 0.2 percent over the week. The
metal, mainly used to produce jewellery and autocatalysts, has
risen 22 percent so far this year, compared to a gain of 10
percent in gold.	
    "I'm of the opinion that gold's premium over platinum should
be corrected in due time, but I didn't expect it to come so
quickly," said Yuichi Ikemizu, head of commodity trading, Japan,
at Standard Bank.	
    The focus remains on Impala Platinum, the world's
second-largest platinum producer, which has suffered 100,000
ounces of lost production in a six-week-long strike at its key
Rustenburg mine. The company said it would restart production on
March 5. 	
    	
      Precious metals prices 0334 GMT
  Metal             Last    Change  Pct chg  YTD pct chg    Volume
  Spot Gold        1720.09    2.73   +0.16      9.99
  Spot Silver        35.30   -0.14   -0.40     27.48
  Spot Platinum    1704.74    8.50   +0.50     22.38
  Spot Palladium    712.97   -1.60   -0.22      9.27
  COMEX GOLD APR2  1721.50   -0.70   -0.04      9.87         6897
  COMEX SILVER MAY2  35.38   -0.28   -0.79     26.74         1148
  Euro/Dollar       1.3308
  Dollar/Yen         81.38

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