PRECIOUS METALS - European Morning View - Gold finds background support, vulnerable short-term

Investors continued to reduce their risk exposure Friday as EU debt jitters resurfaced and speculation of further monetary tightening by China intensified following much higher than anticipated inflation data earlier in the week. Equities closed broadly lower with the Dow down 0.8 percent and S&P500 1.2 percent, posting their first weekly declines in 5-weeks. Commodities posted even steeper declines with sugar tumbling almost 12 percent; silver 5.4 percent and oil, gold and copper off around 3 percent; the CRB Index saw its largest one-day decline in 19-months, down almost 3.6 percent by the close.