Another Advance for Gold

Gold edged higher again Friday, as traders prepared for an extra-long weekend to close out this year and ring in 2007.

Prices for February-dated bullion contracts added $1.10 to close at $638 an ounce on the Comex division of the New York Mercantile Exchange. The exchange-traded funds that hold the metal were up also.

The iShares Comex Gold Trust(IAU Quote - Cramer on IAU - Stock Picks) was ahead by 0.2%, and the streetTRACKS Gold Shares(GLD Quote - Cramer on GLD - Stock Picks) was rising by around 0.3%.

Choppy trading marked the last, and shortened, session of 2006 -- a year that saw spot prices jump more than $100 from about $520 in January. Comex floor trading will commence next on Wednesday, as the pit will be closed Tuesday to honor former President Gerald Ford who died this week.

Bullion, which tends to move down in price on dollar strength, received little direction from a mixed greenback. The U.S. currency was gaining on the yen, with one dollar buying 119.1 yen, up from 118.91 yen late Thursday. The euro was moving up vs. the dollar to $1.3192 from $1.3146 a day earlier.

Although the dollar has lost considerable ground against the euro over the past few weeks, mounting evidence points to a more robust U.S. economy next year, a possible positive for the greenback.

"It's quite clear to us that recession is no longer a serious concern," says Lakshman Achuthan, managing director at the Economic Cycle Research Institute in Manhattan. "This is consistent with no rate cut," by the Federal Reserve.

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