Worries about financial stability in Europe persist, boosting demand for gold By Polya Lesova, MarketWatch FRANKFURT (MarketWatch) -- Gold futures rallied to nearly $1,250 an ounce on Friday, as ongoing worries about the financial situation in Europe buoyed demand for the precious metal as a safe haven. Gold for June delivery, the most active contract, rose $17.30 to $1,246.50 an ounce in electronic trading on Globex. The contract earlier hit an intraday high of $1,249.70 an ounce. "Gold continues to profit from the flight of investors to safety and marked interim new record highs," said analysts at Commerzbank AG in Frankfurt. "On both sides of the Atlantic Ocean, investors continue to invest substantial amounts of money into gold funds," they wrote in a note to clients. June gold futures dropped on Thursday after surging to a record closing high of $1,243.10 an ounce in the previous session. Gold is traditionally seen as a safe-haven asset that tends to rise in value at times of economic and financial turbulence. "Investment demand for precious metals is likely to remain strong in the coming weeks as uncertainty lingers about the effective implementation of austerity measures in troubled sovereigns across Europe," said analysts at Credit Suisse in a note. European stocks posted broad-based losses Friday, with the Stoxx Europe 600 index (ST:SXXP 252.27, -4.97, -1.93%) dropping 1.9% in afternoon trading in Frankfurt. U.S. stock futures pointed to a lower opening on Wall Street ahead of a string of economic data, including retail sales, industrial production, and the University of Michigan's consumer sentiment survey. The euro fell to its lowest level in 17 months against the dollar following a media report that French President Nicolas Sarkozy had threatened to pull his nation out of the euro zone. Read more on the euro.

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