Gold Lifts as the Dollar Slides

Updated from 11:49 a.m. EST

Gold prices eased Friday, after a week of frenetic trading.

After rallying to an intraday high of $655.50 an ounce, prices for February-dated bullion futures backtracked to close down $2.30 at $650.60 on the Comex division of the New York Mercantile Exchange. The exchange-traded funds, which hold the metal, were down also with streetTracks Gold Shares (GLD Quote) and iShares Comex Gold Trust(IAU Quote) both 0.4% lower recently.

The late-day dip came despite further weakness in the dollar, the primary driver of a rally which has lifted spot prices for the yellow metal from about $568 an ounce on Oct. 5 to current levels. The value of bullion tends to move in the opposite direction to changes in the price of the U.S. currency.

The euro was recently trading at $1.3315, a fresh 20-month high and up from $1.3244 late Thursday. The dollar was also losing against the yen, with one dollar buying 115.293 yen, vs. 115.75 yen previously.

Friday's dollar decline was in part brought on by a weak Institute for Supply Management index, which fell to 49.5 in November, vs. consensus expectations of 52 and an October reading of 51.2. The fall suggests contraction in the manufacturing sector.

Elsewhere, the Economic Cycle Research Institute provided a strangely bright note, on the back of a week of dour data. The ECRI's Weekly Leading Index logged a 1.5% uptick for the period ending November 24, marking the fourth-straight week of increases. The indicator rose 1.4% in the prior increase.