Gold hit a 2010 high above $1,180 an ounce Friday, fueled by euro strength and investors continuing to embrace the metal's safe-haven properties on unease over euro zone sovereign debt levels.
Gold futures for June delivery advanced $11.90, or 1.02 percent, to settle Friday at $1,180.70 an ounce on the Comex in New York, against $1,166.10 late in New York on Thursday. Earlier Friday, the price rose to $1,182.50, the highest since Dec. 4. The record was $1,227.50 on Dec. 3. Spot gold was at $1,179.80, up $14.80 from previous day.
The precious metal has rallied more than 5 percent so far in April, its biggest one-month rise since November 2009, as credit ratings downgrades of Greece, Spain and Portugal unleashed a wave of risk aversion, channeling money into gold.
Financial markets were settling down slightly, helping the euro to rally, on hopes that a multi-billion-euro aid package for Greece would be hammered out within days and prevent the crisis from spilling over to other countries.
But the fear of contagion was clearly evident in gold, analysts said, with prices now on track to move back toward their December high, a record peak of $1,226.10 an ounce.
"Gold has had quite a big move this month," said Nick Bullman, managing director of Bullman Investment Management. "The buying has been based on default issues in Europe and other debasement of currencies."
"I would definitely agree that $1,200 is back on the table," he added. "People have been buying it very, very consistently."
The euro held on to gains on Friday as hopes of a quick Greek rescue package spurred investors to cover short positions. It is on track to lose 2 percent this month, although it is above this week's one-year low of $1.3114.
The dollar held steady at lower levels versus the euro after a government report showed the U.S. economy grew at a slightly slower-than-expected pace in the first quarter.
Improving risk appetite lifted other commodities, with oil rising 0.9 percent and base metals also climbing.
The world's largest gold exchange-traded fund, the SPDR Gold Trust, said its holdings hit a record 1,159.002 tons as of April 29, up 6.089 tons from the previous day.
"This week we've seen a strong pick-up in safe-haven demand (for gold) and big increases in the U.S. SPDR exchange-traded fund," said James Moore, an analyst at TheBullionDesk.com.
"That is a strong signal that some U.S. investors are very concerned about the possible implications of the European debt situation."
Other precious metals, which are more industrial in use than gold, also recovered some of this week's losses on Friday, tracking gains in other commodities with industrial exposure.
July silver rose 6 cents, or 0.32%, to $18.639. Meger put resistance for July silver around $18.90 to $19, then $19.50. He put support near $18.40, then $17.80. July platinum settled up $11.40 or 0.66%, to $1,745.10 an ounce. June palladium rose $6.75, or 1.23%, to $555.75.
"Physical ETP interest was unchanged across platinum, at its record high at 1.02 million ounces, and silver, close to November lows at 12,150 tons, yesterday, but palladium ... recorded opposing flows," said Barclays Capital in a note.
"Palladium holdings across the five products we track were down 20,000 ounces to 1.816 million ounces," it said. "The U.S. palladium ETP continued to grow ... to hit a record 694,000 ounces, but the European ETFS product has continued to record net redemptions."
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