Gold ends higher, but posts weekly decline
A previous version of this story misstated the day of the week. The story has been corrected.
SAN FRANCISCO (MarketWatch) -- Gold futures shook off early weakness to end modestly higher on Friday, as the rally in most agriculture commodities continued and some traders saw in it the threat of inflation.
Gold for August delivery (GCQ2) advanced $2.40, or 0.2%, to settle at $1,582.80 an ounce on the Comex division of the New York Mercantile Exchange. Silver tracked gold higher but other metals futures lost.
The modest run Thursday and Friday was not enough to erase weekly losses, and the metal ends Friday with a loss of 0.6% on the week.
Prices of grains futures rose on Friday, looking to post record highs amid the worst drought in the U.S. in decades and expectations of significant lower yields for corn and other grains. Livestock prices also ticked higher this week, leading to talks of food price increases and inflation.
Earlier in the week, investors were disappointed with U.S. Federal Reserve Chairman Ben Bernanke's testimony to Congress. Bernanke offer not hint on impending additional stimulus measures.
Also keeping the pressure on for gold earlier on Friday was the stronger dollar, particularly compared to the euro as yields on Spain's benchmark bonds rose well above the critical 7% level.
"The main driver for gold is the strong dollar and weaker euro. In the big picture, the gold market is disappointed not to hear about additional [quantitative easing] this week," said Frank Lesh, broker and futures analyst with FuturePath Trading in Chicago.
The dollar index (DXY) up to 83.474 from 82.926 on Thursday in North American trading.
Strength in the dollar weighs on dollar-denominated commodities such as gold and oil, since it makes them more expensive for holders of other currencies.
The euro fell to $1.2187 from $1.2272 on the Spanish bond yields.
Gold has failed to catch much of a safe-haven bid in recent months, often tracking equity moves and the ups and downs of other commodities.
It has also traded rangebound since early Spring.
U.S. equities traded lower, impacted by the rise in the Spanish bond yields and disappointing earnings from a few bellwethers, including
Gold futures rose on Thursday, breaking a three-day losing streak.
"Although the price of gold was likewise able to gain during the course of trading yesterday, the increase was disproportionately low. Continued (exchange-traded funds) outflows are evidence that gold is currently in lower demand," said analysts of Commerzbank in a note on Friday.
In other precious-metals trading, silver for September delivery (SIU2) rose 8 cents, or 0.3%, to $27.30 an ounce. On the week, silver declined 0.3%.
September copper (HGU2) was down 9 cents, or 2.5%, to $3.45 a pound. On the week, copper is down 1.4%.
Platinum and palladium also headed south, on the day and for the week, with October platinum (PLV2) off $8.60, or 0.6%, to $1,414.50 an ounce. September palladium (PAU2) retreated $8.75, or 1.5%, to $576.10 an ounce.
Weekly, platinum declined 1.4% and palladium was off 1.6%.
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