Gold held within reach of record highs in Europe on Friday as buyers looked to it as a haven against persistent fears of sovereign risk in Europe and after lacklustre US data raised doubts over wider economic recovery.
The precious metal’s gains were limited, however, as immediate concerns over the euro’s outlook were allayed by solid demand at Spanish bond auctions, which eased fears about the government’s debt-servicing ability.
Spot gold was bid at $1,244.65 an ounce at 1017 GMT, against $1,243.40 late in New York on Thursday. US gold futures for August delivery eased $2.30 to $1,245.40.
Prices had reached $1,250.65 on Thursday, close to the record $1,251.20 of last week. Its move came despite a rise in the euro, weakness in which has lifted gold this year as investors bought the metal as an alternative to paper currencies.
“The main driver behind gold is not the currencies; it is the underlying fundamental problems, especially here in Europe,” said Commerzbank analyst, Mr Daniel Briesemann.
“Gold should rise further. It increased significantly on Thursday.” He said the prospect of publication of European bank stress tests was unsettling some market participants amid fears these could point to deeper problems in the financial sector. — Reuters