By Nick Godt, MarketWatch
MUMBAI (MarketWatch) — Gold futures fell on Friday but stayed close to six-week highs as markets keyed on U.S. jobs data and further news in the euro-zone crisis, on the heels of a surprise interest-rate cut by the European Central Bank and hints of further easing measures from the Federal Reserve.
Gold for December delivery GC1Z -0.64% lately fell $7.40 to $1,740.70 an ounce.
On Thursday, gold rallied to a six-week high, rising along with commodities after the European Central Bank lowered rates and Fed chief Ben Bernanke hinted at fresh measures to support waning growth.
The two central banks’ use of monetary policy to support growth should weigh on both the euro and the dollar, while supporting gold as an alternative asset, according to Societe Generale analyst Sebastien Galy.
“As the ECB cuts and the Fed remains hyper-dovish, it captures our core forex view pretty simply,” Galy said in a note.
On Friday, the euro EURUSD +0.28% traded marginally higher, at $1.3842, while the dollar index DXY +0.12% , which tracks the U.S. unit against a basket of six major currencies, rose to 76.735 from 76.645.
Global markets had rallied last week after European leaders agreed to reduce Greece’s sovereign debt by 50%, recapitalize the region’s banks and boost the euro-zone’s rescue fund.
But investors were shocked and markets fell sharply this week after Prime Minister George Papandreou sought a referendum in Greece over the latest bailout and austerity plan.
For now, “risk is back on as sentiment improves on the ECB’s rate cut and the Greek referendum reversal,” analysts at BNP Paribas said.
Nick Godt is a MarketWatch reporter based in Mumbai.
