Gold futures rallied on Friday, as the U.S. dollar sank against other major currencies after European leaders put forward a plan to stabilize the region’s banking sector.
Gold for August delivery surged $48.40, or 3.1%, to $1,598.70 U.S. an ounce on the Comex division of the New York Mercantile Exchange. Prices traded as high as $1,601.30 U.S. an ounce, according to FactSet Research, and weekly gains have reached 1.6% so far.
Metal futures shot higher, along with other commodities and equities, after euro-zone leaders unveiled a series of measures aimed at bringing stability to the region’s financial markets
A marathon meeting concluded with European Council President Herman Van Rompuy outlining a proposal for a single supervisory mechanism for Europe’s banking system and a plan to directly recapitalize the region’s banks.
The greenback fell sharply, spurring buying in dollar-denominated commodities, which dollar weakness makes cheaper for holders of other currencies.
The ICE dollar index, a measure of the greenback’s performance against a basket of six major global currencies, dropped to 81.485 from 82.849 in North American trade late Thursday.
In other trading, July silver futures soared $1.13, or 4.3%, to $27.38 U.S. an ounce.
Copper for July delivery gained 14 cents, or 4.2%, to $3.47 U.S. per pound. Platinum for July delivery added $36.50, or 2.6%, to $1,422.90 U.S. an ounce. September palladium futures rallied $14.20, or 2.6%, to $578.45 U.S. an ounce.
