LONDON—Spot-gold prices are nearing the 2010 high Friday due to the euro's recovery against the dollar and bullish sentiment on gold's technical outlook.
The euro's strength has removed one of this week's drags on gold, leaving the metal free to push higher on the strong upward momentum it has built in its two-week rally, traders said.
After hitting a high of $1,157.25 in intraday trading, spot gold was recently at $1,155.70 an ounce—up 0.4% on the day. The euro hit a three-day high and traded at $1.3392, up from $1.3356 at 0000 GMT. Gold's next target is 2010 high of $1,161.75 a troy ounce reaching on Jan. 11.
Analysts said the resurgence of worries over Greece's debt problems this week have prompted investors to buy gold as a safe haven against currency volatility. Greek government officials said Friday that the country still plans to sell dollar bonds in the U.S. in April despite yields having reached 12-year highs.
Even though the euro's recovery Friday reflects an easing in those concerns, gold's technical factors and gains in other commodities may take over in the near term, traders said.
A London-based trader said gold's steady climb has yet to trigger any heavy selling, suggesting investment demand for gold is stronger than expected, and some market players are still looking for higher prices before shorting.
"It's encouraging price action, it's not backing off when it's being bought," he said. "We're just slowly making our way up."
In other metals, spot silver is 1.2% higher at $18.25 an ounce. Spot platinum is 0.3% higher at $1,714.50 an ounce and spot palladium is up 1.2% at $507 an ounce.
