NEW YORK, Nov 29: Gold posted moderate gains in late on Friday business on an afternoon rally in US equity markets as investors viewed recent efforts by the Federal Reserve to add liquidity as supportive.

But trading was exceptionally quiet with many participants remaining on a long holiday weekend following Thursday’s US Thanksgiving Day holiday.

Traders said terror attacks in Mumbai also underpinned gold as a safe-haven purchase.

We’re seeing a little bit of strength because of the horrible situation that’s occurring in Mumbai, said Frank McGhee, head precious metals trader at Integrated Brokerage Services LLC in Chicago.

At the same time, we’ve had a continuation of the rally we had in the stocks. We had a little bit of light trading, some thin volatility, but overall we’ve held fairly well and put a few dollars on the board, he added.

Over last few weeks when stock markets lost a significant amount of ground, all asset classes, including gold and other precious metals positions, were liquidated for cash.

For most of the last two to three weeks gold has been trading almost lock-step with stocks, and we won’t return to their disconnect until we can see if the (stock) rally actually does hold and we see a base, said McGhee.

Chartists noted that gold has managed to form a short-term base around the $810 level, which held on Friday and will be watched to see if it continues to lend support.

Looking ahead, some traders said they thought gold’s prospects remained positive as the market awaited the outcome of Opec’s production meeting this weekend and a spate of US economic data. Next week’s readings include data on manufacturing, jobs, and auto sectors.

Earlier this week, an announcement by the Federal Reserve outlining an $800 billion lending facility supported consumer debt securities and was in turn helping gold.

The precious metal is heading for its biggest monthly gain in nine years as investors, spooked by the outlook for the global economy, are also buying the metal as a safe haven.

Prices have climbed some $90 an ounce, or 12 per cent, this month.

Gold is also up 12 per cent in euro terms, and 15 per cent in terms of the Australian dollar.

Silver was lower at $10.25 an ounce against $10.31.—Reuters