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Gold at 4-month high, posts 2.3% weekly gain

Gold ends lower as currency fears subside
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SAN FRANCISCO (MarketWatch) -- Gold rose to a four-month high Friday, playing both defense and offense as investors bought it as hedge against still-brewing currency concerns and as a riskier investment they were more comfortable to take on.

Gold for June delivery, the most active contract, rose $11.40, or 1%, to $1,179.80 an ounce on the Comex division of the New York Mercantile Exchange. On the week, gold has gained 2.3%. Monthly gains are nearing 6%.

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Bullion, little changed after gross-domestic-product numbers were released earlier Friday, added to its advance following reports showing a consumer sentiment index at 72.2 in April, down from 73.6 in March, and the Chicago PMI index, showing that business in and around the city had expanded in April.

Gold got a boost from fears and uncertainty still surrounding Greece and its rescue package, expected to be finalized this weekend, and from "investors feeling like taking on a little more risk today," said Matt Zeman, a trader at LaSalle Futures Group in Chicago. A weaker dollar also helped, he added.

"The big thing today is that gold held above the $1,160 level," which had tried to pierce before and failed, Zeman said. "We did see it break through. It looks very bullish to me and looks like it's going to keep working its way higher. We may see going to $1,200 in the next couple of sessions."

Gold settled above $1,200 in early December, only to pull back to $1,172 area and dip as much as the $1,050 vicinity in early February.

"Concerns of a meltdown in European debt markets have abated somewhat but gold's continuing strength in euros and other currencies signals that the worst may not be past," wrote analysts at GoldCore.

Gold retained its gains after the Commerce Department estimated economic growth of 3.2% in the first quarter, in line with analysts polled by MarketWatch but slightly under what others in the market were anticipating. Read about drivers of economic growth.

U.S. consumer sentiment improved marginally in late April after sinking earlier in the month, according to media reports on Friday of the Reuters/University of Michigan consumer sentiment index.

The index rose to 72.2 from 69.5 in mid-April. Economists expected an increase to about 71. March's final reading was 73.6. The index has been largely unchanged since November, remaining at depressed levels.

On Thursday, gold for June delivery lost $3, or 0.3%, to $1,168.80 an ounce, with the fall coming one day after the metal rose to $1,171.80 an ounce, its highest close since early December.

Other metals followed gold on Friday. Silver for July delivery, the most active contract, rose 13 cents, or 0.7%, to $18.71 an ounce. Platinum for July delivery added 44.80, or 0.3%, to $1,738.50 an ounce. Palladium for June delivery gained $4.05, or 0.7%, to $553.05 an ounce.

The SPDR Gold /quotes/comstock/13*!gld/quotes/nls/gld (GLD 115.55, +1.27, +1.11%) , the largest exchanged-traded fund backed by gold, rose 1.2% on Friday. The dollar index /quotes/comstock/11j!i:dxy0 (DXY 81.94, -0.06, -0.08%) , which stacks the U.S. currency against a basket of six currencies, declined 0.3% to 81.79.

Claudia Assis is a San Francisco-based reporter for MarketWatch.

Kate Gibson is a reporter for MarketWatch, based in New York.