RTRS: PRECIOUS-Gold rises on weaker dollar, haven appeal
Gold rose in Europe on Friday as the weaker dollar and interest in bullion as a haven from risk lifted the precious metal from the one-month low it hit in the previous session.
Spot gold was quoted at $823.90/825.90 an ounce at 1057 GMT, up from $817.45 late in New York on Thursday. U.S. gold for February delivery GCG9 on the COMEX division of the New York Mercantile Exchange was up $16.90 at $824.20.
"Risk aversion is high," said Commerzbank analyst Eugen Weinberg. "People are looking at gold right now as a real hedge against everything, an alternative asset."
Turmoil in the banking sector, which saw shares of Bank of America and Citigroup fall sharply on Thursday, is increasing investor jitters and further supporting gold, he added.
"The more problems we see in the banking sector and the financial sector in general, the more attractive gold as a hedge against such risk will be," he said. Weakness in the dollar is also supporting gold. The euro and higher-yielding currencies gained against the U.S. unit as equities rebounded, buoyed by optimism after the U.S. government pledged to provide fresh financial aid to Bank of America. [ID:nLG422468] A softer dollar tends to benefit gold, which is often bought as an alternative asset to the U.S. currency.
Traders are awaiting a series of U.S. data due later in the session, including December inflation and industrial production numbers, to give fresh direction to trade.
"While precious metals might have a quiet day in Asia and Europe, U.S. trading could once again prove to be volatile, with a busy data day. Most notable is U.S. CPI," said Standard Bank analyst Walter de Wet.
"The market expects headline inflation to be in negative territory year on year."
"The release of the University of Michigan consumer confidence data and the TIC data... could prove an important driver for the dollar today," he added.
GOLD, SILVER ETFs HIT RECORD
Investment demand for physical gold remains strong as turmoil in the financial markets and fears over the outlook for the global economy boost bullion's appeal.
The world's largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, said its holdings rose to a fresh record on Thursday of 795.25 tonnes. [ID:nSP375149]
Demand for physical gold from ETFs has been a major factor supporting prices in recent years. In December, SPDR overtook the Bank of Japan as the world's seventh largest holder of gold.
