Gold Climbs as Dollar Index Reaches One-month low

Big 5

Gold prices rose on Friday as the dollar fell to a one-month low against a basket of currencies, including the euro, after European finance ministers agreed to boost the euro zone’s debt crisis firewall to roughly 800 billion Euros ($1.1 trillion).

Spot gold rose 0.2 % to $1,664.48 an ounce at 1333 GMT. The metal is on track for a 6 % gain in the first three months of 2012 after posting its first quarterly drop in three years at the end of last year.

The euro rose 0.3 %, and U.S. and European shares gained after European finance ministers agreed to beef up the region’s crisis-fighting funds.

Last year worries over the potential spread of the euro zone debt crisis helped drive gold to record highs, but the metal has since re-established its usual inverse relationship with the dollar. News from the euro zone that boosts the euro and weighs on the dollar tends to be positive for gold.

The dollar fell to its lowest in a month against a basket of currencies on Friday, extending falls on expectations of more U.S. monetary stimulus. The retreat in the dollar helped push oil prices up 70 cents a barrel.

Gold investors will be closely watching U.S. data in the second quarter for clues as to the likelihood of a fresh round of monetary easing, which could potentially hurt the dollar and support gold.

U.S. gold futures for June delivery were up $12.30 an ounce at $1,667.20.

Canada’s Argonaut Gold Inc (AR.TO) said on Friday its quarterly profit more than doubled, helped by increased volumes and higher gold prices, as Reuters stated.

Silver was up 1 % at $32.52 an ounce. The gold/silver ratio or the number of silver ounces needed to buy an ounce of gold, eased back towards 51 on Friday.

Spot platinum was up 0.8 % at $1,635.74 an ounce and is on track for its best quarterly performance in three years, up 17.6 %. Palladium was up 0.7 % at $647.22 an ounce.