Gold inches down amid concerns over China's fight against inflation

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Gold futures on the COMEX Division of the New York Mercantile Exchange on Friday inched down, as investors worried that China would take more steps to fight against inflation and as a result, damp demands for gold.

The most active gold contract for December delivery shed 70 cents, or 0.05 percent, to close at 1,352.3 U.S. dollars per ounce.

Gold market concluded this week with a one-percent loss, the second straight weekly drop in a row.

Market traders noted that any tightening measures taken by China to fight against inflation would be also translated into economic-slowing efforts, which would dampen the country's demand for precious metal. China is the world's second biggest gold consumer.

China's central bank on Friday ordered banks to set aside an additional 0.5 percent of their deposits from Nov. 29, the fifth such hike this year and the second increase this month. The country's consumer price index (CPI), a main gauge of inflation, soared to a 25-month high of 4.4 percent year on year in October.

Some traders expected China's central bank may further raise its benchmark interest rate given no apparent ease in inflation level.

The gold price has jumped 23 percent in 2010, heading for the 10th straight annual gain, which was driven partly by high demands from Indian and Chinese investors.

However, silver futures for December delivery further hiked 34. 5 cents, or 1.3 percent, to 27.179 dollars. January platinum also climbed 7.2 dollars per ounce to 1,671.1 dollars.

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