Gold up 1 pct, set for worst quarter on record

NEW YORK/LONDON,  (Reuters) – Gold surged around 1 percent in very choppy trade yesterday as heavy short-covering and book-squaring activities on the last trading day of a dismal second quarter lifted the metal after the previous session’s drop.

Silver, which tends to be more volatile than gold, jumped over 4 percent.

Bullion sharply reversed early losses in New York morning trade despite a lack of macroeconomic news and little dramatic movements in other financial markets.

After Friday’s rally, gold is still headed for a 24 percent loss for the second quarter, its biggest quarterly decline since at least 1968.

“There are some people covering shorts and some people taking losses as part of quarterly book-squaring to position for the next quarter,” said Bill O’Neill, partner of commodities investment firm LOGIC Advisors.

Spot gold was up 0.9 percent at $1,210.30 an ounce by 10:59 a.m. EDT (1459 GMT), having earlier traded as low as $1,180.71 an ounce, which marked the cheapest price since August 2010.

On Thursday, gold lost 2 percent and broke below $1,200 an ounce for the first time in nearly three years.

U.S. Comex gold futures for August were down $1.70 to $1,209.90 an ounce, with trading volume already surpassing its 30-day average, preliminary Reuters data showed.

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