BULLION LATEST - Gold drifts to session lows after China rate news, euro cuts gains

 - Gold prices drifted lower during early afternoon trade on Friday, as the euro cut some earlier gains versus the US dollar, while China’s decision to raise interest rates contributed to send markets lower.
- Spot gold, which was caught in light profit-taking this morning, extended losses to a session low of $1,342.90 per ounce at one stage, down $17. It was last seen at $1,345.10/1,345.90 per ounce, still down $16.80. On the charts, the metal’s next support is at 50-day moving average of $1,340.
- The euro was trading at 1.3660 versus the US dollar, while markets remain focused on what measures China is taking to cool inflation, which is currently running at 25-month highs. The country’s central bank raised bank reserve requirements by a further 50 basis points after a previous increase two weeks ago. Lower inflation are negative for gold, usually seen as a good hedge against inflationary concerns. Investors were also awaiting fresh news on the potential Irish economic bailout.
- In other precious metals, silver was down 89 cents to $26.48/26.53 per ounce, while platinum fell $25 to $1,648/1,654 per ounce and palladium was down $9 to $693/698 per ounce.