Gold rose on Friday, putting it on course for a near-2% weekly gain and back towards the previous session's 17-month peak, as suggestions that senior U.S. officials may support a weaker dollar knocked the currency lower.
The dollar slid half a percent against the euro on Friday as comments in favour of a weaker U.S currency by Treasury Secretary Steven Mnuchin — though later somewhat contradicted by U.S. President Donald Trump — led investors to suspect a protracted decline in the greenback may be likely.
Spot gold was 0.5% higher at $1,354.35 U.S. an ounce early Friday morning, up 1.7% so far this week. The metal hit its highest since August 2016 on Thursday at $1,366.07 U.S.
Dollar weakness tends to benefit assets priced in the U.S. unit, which become more affordable for holders of other currencies, while ultra-low interest rates cut the opportunity cost of holding non-yielding bullion.
Gold could benefit if that scorching run cools, analysts said, predicting volatility in equities and concerns over global politics could lead to a spike in gold prices above $1,500 U.S. an ounce this year.
U.S. gold futures were down 0.7% at $1,353.30 U.S. an ounce.
Among other precious metals, silver was up 1% to $17.47 U.S., having touched its highest in more than four months at $17.69 on Thursday. It was this week's best performing precious metal, climbing 2.8% from Friday's close.