Gold futures gained Friday, rising on a weaker dollar after data showed U.S. economic growth slowed more than expected in the first quarter and on renewed concerns about the euro-zone after a downgrade for Spain’s debt.
Gold for June delivery rose $7, or 0.4%, to $1,667.50 U.S. an ounce on the Comex division of the New York Mercantile Exchange.
The contract rallied 1.1% Thursday to end at $1,660.50 U.S. an ounce, its highest settlement in two weeks.
Concerns rose about the euro-zone after Spain’s debt was downgraded, which also pressured the euro versus the dollar.
Standard & Poor’s Ratings Services downgraded Spanish bonds two notches, saying it reflected worries about increased risks of the country’s government debt balanced against difficult economic conditions, and the potential need of more support for the banking sector.
The euro rallied 0.5% to $1.3252. The dollar index, which measures the performance of the U.S. unit against a basket of six major currencies, dropped to 78.758, down from 79.138 late Thursday.
Dollar weakness is a positive for dollar-denominated commodities such as gold, because it makes them cheaper for holders of other currencies.
Earlier Friday, Commerce Department data showed that the U.S. economy grew at an annual rate of 2.2% in the first quarter of the year, a slowdown from the 3.0% rate recorded in the final three months of 2011.
Economists expected 2.7% growth in the first quarter.
The broader suite of metals futures also traded higher, focusing on rising U.S. equities on the back of positive earnings for heavyweight companies.
Silver for May delivery rose three cents, or 0.1%, to $31.24 U.S. an ounce. Copper for the same month’s delivery gained four cents, or 1.1%, to $3.81 U.S. a pound.
