Singapore: Gold regained its footing on Friday after the euro’s weakness pulled it lower in the previous session, while platinum and palladium dropped from their strongest levels in more than a year.

Bargain hunting and firmer equities helped lift gold prices although thin trade ahead of the Lunar New Year exaggerated movements, with investors also factoring in China’s better-than-expected trade data for January.

Gold fell to $1,667.64 an ounce before rebounding to $1,671.22, steady from the previous session. Gold, which is heading for its second straight weekly rise, ended up around 7 per cent in 2012 — the 12th straight year of gains, making it one of the longest bull runs ever for a commodity.

“For gold, the technical picture comes into place,” said Dominic Schnider, an analyst at UBS Wealth Management in Singapore. “I think we are at a crossroad where the uptrend since May is actually meeting the downtrend from September-October.

“So from that angle, it’s very important that we continue to see the uptrend being confirmed.”

US gold futures were also steady at $1,672.00 an ounce.

Platinum and palladium extended losses, having rallied to their highest level since September 2011 earlier this week on hopes of a better economic outlook.

The two metals, which are used in jewellery and auto catalysts, had gained, before the recent losses, on a more positive economic outlook and after mining disruptions in South Africa, as well as a drop in supply from Russia.

Platinum faces a resistance at $1,777 per ounce, and may retrace into a range of $1,620-$1,650 over the next four weeks, according to Wang Tao, a Reuters market analyst for commodities and energy technicals.

In other markets, shares edged up after China’s trade data for January handily beat forecasts to underscore a recovery trend, while the euro hovered near a two-week low after European Central Bank’s chief cited downside risks to the bloc’s economy.

A firmer dollar weighs on gold prices by making the metal more expensive for holders of other currencies.

China’s exports and imports surged in January as the first hard data of the year pointed to robust domestic demand and a pick up in the economy not solely explained by the timing of the Lunar New Year holiday.

“There’s pre-holiday buying in Hong Kong and China, which has pushed up the gold price a little bit, but it’s pretty quiet on our side,” said a dealer in Hong Kong.

“Let’s see what people think about gold after the holiday, whether it will break the current ranges.”

China’s gold production rose for a sixth consecutive year and hit a record 403 tonnes in 2012, keeping its ranking as the world’s largest bullion producer, the Shanghai Securities News said on Thursday.