Gold futures ended higher for a second straight day Friday, amid inflation concerns notwithstanding a strong dollar. There were worries over spiraling borrowing costs at a Spanish bond auction which crossed the crucial 7 percent mark.
Borrowing costs at Spanish bond auctions soared with the 10-year note yield at 7.23 percent, while the 2-year bonds attracted yields of of 5.70 percent.
Gold for August delivery, the most actively traded contract, gained $2.40 or 0.2 percent to close at $1,582.80 an ounce Friday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1586.30 an ounce and a low of $1,572.60 an ounce.
For the week, gold shed about 0.3 percent.
Yesterday, gold snapped its three-session losing streak as investors were on bargain buying with most commodities trading higher and the dollar weakened against a basket of major currencies.
The euro traded at a two-year low against the dollar at $1.2160 on Friday, as compared to $1.2272 late Thursday in North America. The euro scaled a high of $1.2283 intraday and a low of $1.2144.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.445 on Friday, up from from 82.926 in North American trade late Thursday. The dollar scaled a high of 83.55 intraday and a low of 82.87.
In economic news from the eurozone, producer price inflation in Germany slipped in June to its lowest level since May 2010, the Federal Statistical Office said. The producer price index rose 1.6 percent year-on-year in June from 2.1 percent in May. This was the lowest rate of inflation since May 2010, when it stood at 0.9 percent. Economists expected an increase of 1.8 percent in the producer price index.
The Spanish government cut its economic forecast and expects recession to extend into next year as it adopts more austerity measures. The Spanish economy is now expected to shrink 0.5 percent in 2013, against an earlier growth forecast of 0.2 percent. The economy is expected contract 1.5 percent this year, slightly less than the 1.7 percent decline predicted earlier. For 2014 and 2015, the Spanish economy is forecast to grow 1.2 percent and 1.9 percent, respectively.
Meanwhile, Eurozone finance ministers gave their final nod of approval for a 100 billion euro bailout deal for troubled Spanish banks on Friday.
by RTT Staff Writer
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