Gold on Friday rallied through $970 an ounce for the first time since February in Europe as traders bought the metal as a hedge against weakness in the dollar.
Rising oil prices, reports of a pick-up in Middle Eastern demand, and firm buying in India, the world’s biggest gold consumer, during the wedding season are also supporting prices, analysts said.
Spot gold was bid at $972.60 an ounce at 5:23 a.m. EDT, against $958.80 an ounce late in New York on Thursday.
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“Forex is really the big driver of the market,” said senior Commerzbank trader Michael Kempinski. “Oil, which is at its highest this year, is also supporting gold pretty well.”
The dollar .DXY fell toward five-month lows against a basket of currencies on Friday as hopes the worst of the downturn has passed dented safe-haven buying of the unit, and amid worries over U.S. government debt levels.