Gold holds near $1,780/oz, eyes second monthly gain

LONDON: Gold prices held just below $1,780 an ounce in Europe on Friday, supported by gains in the euro and expectations that monetary policy will remain loose in key economies, but was struggling to maintain traction after this week’s already hefty price climb.
Silver rallied to a fresh five-month high after breaking a key technical level, meanwhile Spot gold was at $1,778.34 an ounce at 1037 GMT against $1,779,79 late on Thursday, while US gold futures for February delivery were down $5.70 at $1,780.50.
The euro hit a 2-1/2-month high against the dollar, building on hefty gains it made a day earlier after improved German business sentiment data, and on lingering relief over an agreement for a second bailout of Greece.
A two-day meeting of Group of 20 finance ministers and central bankers this weekend will likely be dominated by talk of the eurozone debt crisis.
LGT Capital Management analyst Bayram Dincer said investors were moving into gold on the back of expectations for further monetary easing in the United States and the eurozone.
“It is really monetary (policy) expectations that are making the investment rationale for gold,” he said.
Sharper appetite for assets seen as higher risk drove stocks higher in Europe, while safe-haven German government bonds dipped. Oil prices meanwhile extended this week’s strong gains as investors fretted over Iranian supply.
Gold has risen 13.7 percent this year, and is heading for its best weekly performance in four, currently up 3.3 percent.
Silver prices were up 0.6 percent at $35.54 an ounce, having earlier touched a five-month high at $35.70 an ounce. On Thursday silver’s climb picked up momentum after breaking through its 200-day moving average at $34.84.
Platinum group metals meanwhile took a breather after hitting their own five-month highs earlier this week after a strike at Impala Platinum’s Rustenburg mine, the biggest of its kind, turned violent.
Spot platinum was down 0.2 percent at $1,715.49 an ounce, while spot palladium was down 0.4 percent at $714.22 an ounce. reuters

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