Gold rises on firmer euro, but set for weekly fall

Gold prices rose back above $1,560 an ounce in Europe on Friday, snapping four sessions of losses, as the euro recovered from two-year lows against the dollar, though worries over the outlook for the euro zone kept investors on edge.

By (Reuters)

Published: Fri 25 May 2012, 4:42 PM

Last updated: Tue 7 Apr 2015, 11:25 AM

Spot gold was up 0.3 percent at $1,562.90 an ounce at 0918 GMT, having fallen as low as $1,533.41 earlier this week as worries that Greece could be set to exit the euro zone hurt the euro and boosted interest in the dollar as a haven from risk.

It remains on track for a 1.9 percent loss this week.

“Gold’s direction seems to be driven more by the level of market risk aversion and the euro currently,” BNP Paribas analyst Anne-Laure Tremblay said.

The euro inched off early lows against the dollar on Friday as bearish investors took a breather from a sharp sell-off this week, although confidence in the unit remained fragile.

Concerns about Greece leaving the euro zone prompted macro funds, real money and institutional investors to ramp up selling of the currency this week after an inconclusive election left the country at risk of bankruptcy.

Other assets seen as higher risk rebounded on Friday, with bargain hunters stepping in to lift European shares for a second day after stinging losses earlier in the week were sparked by worries over the global economy and Europe’s debt woes.

Meanwhile, yields on safe-haven German bunds rose further from the previous session’s record lows as investors pumped cash into assets offering a better return.

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