Gold For Next Week

A weakening dollar and short covering drove investors back into Gold on Friday, lifting prices to end a sharp four-session pullback that still yielded the biggest weekly decline in almost three months. Spot Gold rallied as much as 1.7 percent to $1,600.49 per ounce, and steadied at $1,596.40 up from a near 3-month low at 1,560.36 hit in the previous session. U.S. Gold rose 1.31 percent to close at $1,597.90 per ounce, after hitting a high at $1,598.10 per ounce. A slightly weaker dollar against a basket of currencies also helped boost precious metal prices. A softer U.S. currency makes dollar-priced commodities, such as Gold, more affordable for holders of other currencies. For the week, bullion lost around 6.60 percent, its biggest fall since late September. It remains vulnerable to a deepening euro zone debt crisis and rising funding stress. The need for cash has overwhelmed Gold's traditional tatus as a safe haven in the past few months, putting the metal on course for its first quarterly fall since end-September 2008 when the global credit crunch was at its worst. Gold has, therefore, benefited recently from developments that have reduced risk aversion and the flight to cash. It got a boost after Spain attracted solid demand for its bonds on Thursday, helping to ease concerns the country could be among the next to fall in the euro zone's debt crisis.

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