Gold steadies at $1,290 per ounce, heads for second weekly drop

LONDON, May 9 (Reuters): Gold held steady around $1,290 an ounce on Friday, underpinned by strong chart support, but remained on track to fall for a second week as the dollar took support from euro weakness and traders awaited further news on Ukraine.
The dollar extended gains against the single currency after posting its biggest one-day rise since mid March on Thursday, as investors positioned for more monetary stimulus from the European Central Bank.
Spot gold was at $1,290.60 an ounce at 1232 GMT, little changed from $1,289.00 late on Thursday, while U.S. gold futures for June delivery were up $3.70 an ounce at $1,291.40. The metal has found solid support at its 100-day moving average at $1,287 an ounce, dealers said.
"With a lack of any particular news on the economic front, and with the tensions in Ukraine having declined from the elevated levels we've seen recently, the market is searching for direction, stuck in a range either side of $1,300," Mitsubishi analyst Jonathan Butler said.
"The long-term trend is still downwards for gold," he added. "If we see a convincing breach and a close below $1,280, that will confirm the trend, and we might go on to re-trace back down to the $1,240s."
The metal rallied to three-week highs on Monday on the back of elevated tensions in Ukraine, but it failed to maintain those gains after Russian president Vladimir Putin said he was willing to negotiate with European officials over the crisis.
Pro-Moscow separatists in eastern Ukraine ignored a public call by Putin to postpone a referendum on self-rule, however, declaring they would go ahead on Sunday with a vote that could lead to war.