NEW YORK, July 19:- Gold retraced from its session lows but still ended 1 per cent lower on Friday, as signs of stability in financial markets reduced bullion’s safe-haven appeal in times of market turmoil.

Spot gold was at $955.45/957.05 by New York’s last quote at 2:15 p.m. from $962.10/963.10 an ounce late in New York on Thursday, having earlier slipped as low as $949.50 an ounce.

The precious metal slipped to a one-week low in early afternoon trade after better-than-expected earnings from leading US bank Citigroup boosted the dollar and sent equity markets higher in Europe.

US gold contract for August delivery settled down $12.70, or 1.3 per cent, at $958 an ounce on the COMEX division of New York Mercantile Exchange.

In early trading, US stocks dipped as the market reacted to disappointing earnings from Microsoft and Google released after the bell on Thursday. This boosted interest gold as an alternative investment to equities.

In the last few weeks, where the equity markets started to tumble, gold has started to shoot up, so there has been a good link, said Standard Chartered analyst Dan Smith.

The dollar also came off highs against the euro, having rallied against a basket of currencies earlier in the session after the Citigroup news. Gold tends to benefit from a weaker dollar, as it is often bought as a hedge against currency weakness.

The other main external driver of gold, oil, was lacklustre. New York crude futures have dropped around 12 per cent from the record high of $147.27 they hit at the end of last week, despite a small bounce on Friday before it eventually closed lower.

Weaker oil prices tend to drag gold lower, both because the precious metal is often bought as an inflation hedge and because softer crude can weaken interest in commodities as a whole.

Spot platinum slipped on Friday for a fifth successive day, after supply fears linked to an electricity shortage in South Africa receded.

Spot platinum fell to $1,846.00/1,866.00 an ounce from $1,881.00/1,901.00 late in New York on Thursday, having hit a session low of $1,836.50, its weakest level since May 2.

Spot palladium slipped to $411.50/419.50 an ounce from $420.00/428.00 an ounce, while silver edged down to $18.07/18.13 an ounce from $18.39/18.48 late in New York on Thursday.—Reuters