Gold settles higher on euro optimism
SAN FRANCISCO (MarketWatch) -- Gold futures on Friday extended gains to a third session after France and Germany pledged to support for the euro, pressuring the U.S. dollar and infusing markets with guarded optimism about the euro bloc.
Gold for August delivery (GCQ2) rose $2.90, or 0.2%, to settle at $1,618 an ounce on the Comex division of the New York Mercantile Exchange.
That was gold's highest settlement since early July, and one that brought weekly gains of 2.2% to the metal.
Prices moved well off highs, however, as the session progressed. Gold earlier traded as high as $1,628.60 an ounce.
"We have a nice shot to the upside after some follow-through" buying after two days of gains, said Stephen Platt, an analyst with Archer Financial in Chicago.
Prices had earlier dipped in and out of the red, as U.S. growth in the second quarter tapered off to 1.5% from 2% in the prior quarter, data showed.
Economists polled by MarketWatch had expected a 1.3% rise.
Gold rose on Thursday after European Central Bank President Mario Draghi vowed to do "whatever it takes" to preserve the euro.
On Friday, German Chancellor Angela Merkel and French President François Hollande tried some of the same, issuing a statement vowing to do "everything possible to protect the euro zone."
"A lot of people are looking at it as just talk," said Platt. "I'd like to see some action."
If European authorities agree on bringing more liquidity to the markets, gold would benefit, he added.
European markets and the euro also got a boost Friday after the French daily Le Monde reported the ECB and euro-zone governments would be buying Spanish and Italian debt.
The ICE dollar index (DXY) , which compares the U.S. unit to a basket of six currencies, was at 82.424, down from 82.834 reached in late North American trading Thursday.
A weaker dollar tends to bolster gold and other dollar-denominated commodities as it makes them cheaper to holders of other currencies. For gold, a weaker dollar also spurs demand for the metal as an alternative to currencies.
Other metals futures also ended higher, with silver and palladium shaking off early losses to settle in the black.
September silver (SIU2) gained 5 cents, or 0.2%, to end at $27.50 an ounce. Silver rose 0.7% on the week.
September palladium (PAU2) rose $1.95, or 0.3%, to $571.85 an ounce. On the week, however, palladium declined 0.7%.
Copper for September delivery (HGU2) rose 3 cents, or 1%, to $3.43 a pound. The red metal also posted losses for the week, down 0.6%.
October platinum (PLV2) rose $2,60, or 0.2%, to $1,408.20 an ounce. Platinum lost 0.4% on the week.
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