Gold Closes Higher On Weak Dollar, Gains 2% For Week

Gold gained once again on Friday as the dollar slipped. Gold has had an overall gain of 2% on the week. Investors are also closely watching the developments of talks between Greek government and private creditors about a write-off of sovereign debt.

Jan 20, 2012

Gold futures rebounded on Friday as the dollar slipped, shedding early gains with some positive economic data from Europe and U.S.

Investors were also keenly tracking the developments of talks between the Greece government and private creditors on a substantial write-off of sovereign debts.

Gold for February delivery, the most actively traded contract, moved up $9.50 or 0.6 percent to $1,664.00 an ounce on Friday. The precious metal traded at an intraday high of $1,666.80 an ounce and a low of $1,645.20. For the week, gold prices gained 2 percent.

The dollar index, which tracks the U.S. unit against six major currencies, dropped to 80.195 on Friday from 80.198 late Thursday, having scaled a high of 80.438 earlier in the day.

In Greece, negotiations on debt write-off with private creditors progressed satisfactorily, with investors expecting a positive conclusion to the talks.

The euro rose to $1.2940 on Friday from $1.2942 in late Thursday trade.

In the U.S., the National Association of Realtors said existing home sales rose 5.0 percent to an annual rate of 4.61 million in December from a downwardly revised 4.39 million in November. Economists had expected sales to increase by 5.2 percent to an annual rate of 4.65 million from the 4.42 million originally reported for the previous month.

From the euro zone, German producer price inflation in 2011 quickened to 5.7 percent from the preceding year, the biggest annual rate since 1982, data from the Federal Statistical Office showed. The index of producer prices for industrial products rose 4 percent in December from the prior year, down from November's 5.2 percent. Also, the rate stayed well below the 4.6 percent forecast by economists.

Elsewhere, retail sales in U.K. recovered in December, as widely expected, after easing in November, data from the Office for National Statistics showed. Retail sales volume, including auto fuel, advanced 0.6 percent month-on-month, following a 0.5 percent drop in November.

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