Gold futures moved higher for a third straight day on Friday, closing at a seven-week high as the dollar continued to weaken.
Prices were also supported by some disappointing data showing that the U.S. economy grew less-than-expected in the fourth quarter. Gold prices gained 4.1 percent for the week.
Gold for February delivery, the most actively traded contract, moved up $5.50 or 0.3 percent to close at $1,732.20 an ounce on Friday. The precious metal traded at an intraday high of $1,735 an ounce and a low of $1,714.20 an ounce.
The dollar continued to weaken against most currencies on Friday after data showed the U.S. economy grew less than expected in the fourth quarter, leading to waning investor appeal for the greenback.
The dollar index, which tracks the U.S. unit against six major currencies, dropped to 78.882 on Friday from 79.416 late Thursday.
Meanwhile, the euro scaled a high for the year on news reports citing an unnamed EU official that Greece and its private creditors were close to an agreement on the write-downs of its sovereign debt.
The euro was trading at $1.3211 on Friday from $1.3107 in late Thursday trade.
In economic news, the U.S. Commerce Department said the economy grew 2.8 percent in the final quarter of 2011, up from the 1.8 percent growth posted for the third quarter.
Nonetheless, the growth fell short of the 3.1 percent projected by most economists in what may be a sign that economic recovery is still stagnant.
On the other hand, U.S. consumer sentiment in the month of January improved by even more than previously estimated, according to a revised report released by Reuters and the University of Michigan on Friday.
The consumer sentiment index for January was upwardly revised to a reading of 75.0 from the mid-month reading of 74.0, coming in well above the final December reading of 69.9. Economists had expected the index to be unrevised.
From the euro zone, German import price inflation eased sharply and for a third consecutive month in December, data from the Federal Statistical Office showed.
Inflation eased to 3.9 percent in December from 6 percent in November and 6.8 percent in October. Economists expected the rate to be 3.8 percent.
Italy successfully issued 11 billion euros worth of treasury bills on Friday, meeting the maximum target. The Treasury sold 8 billion euros worth of 182-day bills at a lower cost. The yields dropped sharply to 1.969 percent from 3.251 percent recorded at a similar auction conducted on December 28.
Meanwhile, Fitch downgraded its rating on the debt of five EU countries: Spain, Belgium, Italy, Cyprus and Slovenia. The ratings agency also affirmed Ireland's rating.
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