Gold Ends A Shade Higher, Gains 3.1% For Week

(RTTNews) - Gold futures pared early losses to end a tad higher on Friday, tracking declining global equity markets following some soft economic data from the U.S. with the dollar continuing to trend lower.

For the week, gold futures gained about 3.1 percent.

In some soft economic news, industrial production in the U.S. declined in April, reflecting a drop in mining and utilities output, a Federal Reserve report showed Friday.

A University of Michigan report on Friday showed a substantial decrease in U.S. consumer sentiment in May, reflecting decreases in the assessment of current conditions and the economic outlook. Meanwhile, Business conditions for New York manufacturers improved slightly in May, a Federal Reserve Bank of New York report said Friday.

Analysts say a weaker U.S. dollar, renewed physical demand and safe haven buying fueled a strong rally for gold earlier in the week.

Speculation that the Federal Reserve will delay raising interest rates, particularly after a grim April retail sales report, also boosted gold's appeal.

Germans are snapping up gold in fear that a Greek exit from the euro zone will wreak havoc on the economy over there.

Gold for June delivery, the most actively traded contract, inched up $0.10 to settle at $1,225.30 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.

Gold for June delivery scaled an intraday high of $1,225.80 and a low of $1,210.60 an ounce.

On Thursday, gold futures gained $7.00 or 0.6 percent to settle at $1,225.20 an ounce, as the dollar dipped to its lowest of the year against the euro after some recent soft economic data from the U.S.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 723.91 tons on Friday, from its prior close of 728.32 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 93.31 on Friday, down from its previous close of 93.39 on Thursday in late North American trade. The dollar scaled a high of 94.03 intraday and a low of 93.19.

The euro trended higher against the dollar at $1.1443 on Friday, as compared to its previous close of $1.1410 in North American trade late Thursday. The euro scaled a high of $1.1460 intraday and a low of $1.1325.

On the economic front, industrial production in the U.S. fell 0.3 percent in April, matching the upwardly revised decrease in March. Economists expected production to remain unchanged compared to the 0.6 percent drop originally reported for the previous month.

Reflecting decreases in the assessment of current conditions and the economic outlook, a University of Michigan report on Friday showed U.S. consumer sentiment index in May to have tumbled to 88.6 from 95.9 in April, while economists had expected the index to edge down to 95.8.

Business conditions for New York manufacturers improved slightly in May, with the New York Fed's general business conditions index climbing to a positive 3.1 from a negative 1.2 in April. A positive reading indicate growth in regional manufacturing activity. However, economists expected the index to show a somewhat more significant improvement to a reading of positive 5.0.

Elsewhere, U.K. construction output recovered strongly in March, data from the Office for National Statistics showed Friday. Construction output grew 3.9 percent in March from February when it fell 0.3 percent. Economists had forecast a 4 percent growth for March.

Germany's manufacturing employment increased in March, data from Destatis showed Friday. The number of people worked in manufacturing units advanced 1.2 percent or 63,000 from the prior year.