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Gold hits 2012 high on hope for Spain’s economy

Gold has hit a high for the year on speculation that Spain may be working on a request for financial help from other European countries.

December gold rose $7.80 to finish at $1,778 per ounce. Earlier Friday, it hit $1,790 per ounce, which topped the previous 2012 high, set in late February.

Analysts speculated that Spain is working on an economic reform plan that will include a request for bailout funding from Europe.

The country’s borrowing costs have dropped sharply since the European Central Bank said recently it will buy unlimited amounts of government bonds to help countries with heavy debt loads. Those borrowing costs probably will rise again if Spain doesn’t request a bailout soon, analysts said.

In the US, the Federal Reserve also has put a plan in place to encourage economic growth.

Such economic stimulus programs continue to benefit gold prices, said Phillip Streible, a senior commodities broker at RJ O’Brien.

Investors buy gold as a hedge against inflation and volatility in currencies. Gold is priced in dollars but can be converted into any currency.

Other commodities were mostly higher as traders waited for more clues about how the global economy will fare under economic stimulus programs in several countries.

Silver for December delivery fell 4.4 cents to finish at $34.638 per ounce, December copper rose 3 cents to $3.789 per pound, October platinum gained $13.70 to $1,637.60 per ounce and December palladium ended up $10.45 at $671.55 per ounce.