Gold futures pulled back Friday morning as risk appetite eases while the dollar stabilizes and the metal continues trading as a risk play.
In recent trading, benchmark February gold was down $4.10 at $1,103.30 U.S. an ounce on the Comex division of the New York Mercantile Exchange. The ICE Futures U.S. dollar index was up 0.057 point at 77.751 points.
The euro was under slight pressure from ongoing credit concerns about the fiscal health of euro-zone members while the dollar rose against the yen after the Bank of Japan renewed its pledge to fight deflation.
A sharply stronger buck Thursday was primarily responsible for pressuring the metal as risk appetite waned and investors sold gold and bought the dollar.
Gold prices have had a close inverse correlation to the buck for the most part since early November as investors have treated the metal as a risk play. While traditionally, gold has been viewed as a safe-haven asset, it's recently been bought when risk tolerance is high and sold in favor of the dollar when the desire for risk ebbs.
Also, U.S. dollar-denominated assets like gold often trade inversely to the greenback because dollar movements make them more or less expensive for those using other currencies.
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