Gold futures settled higher Friday, on hopes that Spain and EU officials could possibly work out an economic reform plan that enables the fourth largest economy in Europe to request a bailout. Gold also found support with the dollar weakening against the euro and other major currencies, on fears the recent measures to stimulate growth could fuel inflation and keep interest rates at rock bottom.
Gold for December delivery, the most actively traded contract, gained $7.80 or 0.4 percent to close at $1,778.00 an ounce Friday on the Comex division of the New York Mercantile Exchange.
Gold for December delivery traded at an intraday high of $1,790.00 and a low of $1,769.10 an ounce.
For the week, gold prices gained around 0.5 percent.
Yesterday, gold settled marginally lower with the dollar strengthening against a basket of major currencies and a declining U.S. equity market. Gold prices were also impacted by some soft economic data globally and on profit taking following recent gains made by the precious metal.
The euro traded higher against the dollar at $1.2999 on Friday, as compared to $1.2968 late Thursday in North America. The euro scaled a high of $1.3047 intraday and a low of $1.2956.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.28 on Friday, down from 79.38 in North American trade late Thursday. The dollar scaled a high of 79.45 intraday and a low of 79.05.
In economic news from Europe, the U.K. budget deficit remained unchanged in August from the previous year, data from the Office for National Statistics showed. Excluding intervention, public sector net borrowing was GBP 14.4 billion in August, equal to the net borrowing in August 2011. Economists forecast a shortfall of GBP 15 billion.
The World Trade Organization (WTO) Friday lowered its growth forecast for global merchandise trade, citing economic slowdown in China and the other major world economies, and the unresolved debt crisis in the Eurozone. The WTO downgraded its outlook for international trade growth to 2.5 percent this year from its previous estimate of 3.7 percent. The forecast for 2013 has been revised down to 4.5 percent from 5.6 percent.
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