Gold Ends Higher On Weak Dollar, Fed; Gains 1.2% For Week

(RTTNews) - Gold futures ended at a one-month high Friday, tracking mostly declining global equity markets and the dollar weakening against some major currencies. The precious metal spiked after the Federal Reserve's reaffirmed its decision to continue the accommodative monetary policy, even as investors await fresh economic cues.

The quantitative easing policy of the U.S. Federal Reserve with its monthly $85 billion bond-buying program tends to weaken the dollar to spur recovery, while tapering of the program strengthens the greenback.

Gold for August delivery, the most actively traded contract, gained $8.70 or 0.7 percent to close at $1,292.20 an ounce Friday on the Comex division of the New York Mercantile Exchange.

Gold for August delivery scaled an intraday high of $1,297.10 and a low of $1,281.40 an ounce.

For the week, gold futures gained 1.2 percent.

Yesterday, gold settled higher as investors mulled over Federal Reserve Chairman Ben Bernanke's statement before the Senate Banking Committee, stressing it was too early to say if the central bank will begin tapering its asset purchase program at its September meeting. Bernanke had earlier said there was no set time line before the central bank to slow down its quantitative easing program.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 936.07 tons from 937.57 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.56 on Friday, down from 82.79 late Thursday in North American trade. The dollar scaled a high of 82.94 intraday and a low of 82.53.

The euro traded higher against the dollar at $1.3139 on Friday, as compared to $1.3109 late Thursday in North America. The euro scaled a high of $1.3150 intraday and a low of $1.3090.

In economic news from the eurozone, Germany's producer price inflation accelerated in June, in line with economists' expectations, latest data showed. The producer price index increased 0.6 percent on an annual basis in June, following a 0.2 percent gain in May, the Federal Statistical Office said. The growth rate for June was in line with economists' forecast.

The U.K. public sector net borrowing, excluding interventions, declined to GBP 8.5 billion in June from GBP 11.9 billion last year, data from the Office for National Statistics showed. The ONS said PSNB has been reduced by GBP 3.9 billion of cash transfers from the Asset Purchase Facility Fund to government. If these transfers are excluded then public sector net borrowing in June 2013 was GBP 12.4 billion.

In a bid to reduce financing costs for companies, improve independent pricing, and better allocation of financial resources, China's central bank announced removal of all controls on lending rates of banks, effective Saturday. In a statement on Friday, the People's Bank of China said it will scrap a floor on lending rates set at 70 percent of the benchmark rate.