Gold heads for worst weekly fall since March

Gold slipped more than half a percent on Friday, tracking equities lower, as investors failed to shake off worries about Europe's debt crisis and its impact on global economic growth. Gold, though traditionally seen as a safe haven, bore the brunt of the sell-offs across risk assets such as equities, industrial metals and oil this week, forcing investors and speculators to sell bullion to cover losses in other markets. Gold eased $7.87 to $1,585.86 an ounce by 8.05am UAE time after shares in Asia were hit by JPMorgan's $2 billion loss from a failed hedging strategy and by political turmoil in the euro zone. It is poised to fall by more than 3 percent this week, its deepest drop since early March. "We are still uncertain about what's happening out of the euro zone. For now, I think gold will trade largely like a risk asset and probably track equities as well. Support level is about $1,500," said Lynette Tan, an analyst with Phillip Futures in Singapore. "The increase we saw yesterday was a bit of bargain hunting from a three-day of losing streak." US gold for June delivery fell $9.10 an ounce to  $1,586.40 an ounce, having briefly risen above $1,600 on Thursday.      MSCI's broadest index of Asia-Pacific shares outside Japan dropped to its lowest since January, with risk appetite still largely muted due to heightening political and policy uncertainty in the euro zone. Investors had turned to gold as a safe haven during the debt crisis last year, sending prices to an all time high of around $1,920 an ounce. But this year, bullion is trading more in line as a commodity that moves in the opposite direction to the US dollar. The euro plunged to a 3-1/2 month low on Friday as news of JPMorgan's trading losses from a failed hedging strategy spooked investors and lent support to the safe haven dollar. European Union paymaster Germany warned Greece on Thursday that European partners could only go on aiding debt-ridden Athens if it sticks to an international bailout programme rejected by voters in a general election. In the physical market, weaker prices ignited buying from Thailand, Indonesia and also main consumer India. Premiums for gold bars in Singapore edged up to $1.10 to spot London prices from $1.0 quoted on Thursday. "Indian buyers have reappeared, which I think is also due to the strengthening of the rupee. That helps encourage them to buy this time around," said a dealer in Singapore. Bullion dealers shrugged off China's lower inflation data as investors attention remained firmly fixed on the debt crisis in Europe.   China's annual consumer inflation moderated in April despite strong food price rises, which could potentially give Beijing more scope to loosen policy to help the economy rebound from a first-quarter slowdown in growth. "There's a small amount of selling of gold after we failed to stay above $1,600 last night. Gold is heading south for the time being. The economy in the euro zone is very bad, and people are rushing to buy the US dollar," said a dealer in Hong Kong. "Let's see if gold eventually breaks $1,580."