Gold rises after a 2 percent loss (Reuters) (21-01-2011)

SINGAPORE – Spot gold was up on Friday after a two percent decline in the previous session and a possibility for gold to extend its loss to $1,322.

Holdings in the SPDR Gold Trust remained unchanged. Holdings in the iShares Silver Trust, the world's largest gold-backed exchange-traded fund, fell further to 10,526.70 tonnes, its lowest since November.       

Spot gold gained 0.1 percent to $1,346.88 an ounce by 0700 GMT, but was on course for a third consecutive week of falls. U.S. gold was little changed at $1,346.5.

Investors in gold and silver lost a little their interest in the beginning of the year, with holdings in the exchange-traded funds dropping to multimonth lows.   

According to analysts, the recent downturn in gold and silver prices is a healthy correction that will not last long.

Spot silver fell to a two-month low at $27.18, before recovering to$27.36, headed for a 3.7 percent weekly decline. Silver had lost over 11 percent so far this year, after posting a whopping 80 percent gain in 2010.

The CME Group, the parent of the Chicago Board of Trade, said it would hike requirement margins on gold futures by 11 percent, and silver futures by six percent.

Source: Reuters