NEW YORK (
settled higher Friday as bargain-hunters beat out profit-takers and a weak U.S. retail sales number increased gold's appeal as a safe haven asset.
Gold for August delivery closed $8 higher at $1,230.20 at the Comex division of the New York Mercantile Exchange. The gold price Friday has traded as high as $1,231.50 and as low as $1,218.10. The
was adding 0.36% to $87.49 while the euro was slipping slightly to $1.20 against the dollar. The gold spot price Friday was adding more than $9, according to Kitco's gold index.
Gold prices hit a record high of $1,254 an ounce
Tuesday but for the week have risen just 0.73% ending pretty much where they started. The risk trade is dominating gold in the short term as encouraging economic data prompts investors to sell gold for stocks while negative headline news spurs a rush out of equities and into gold.
Gold's Record High Was A Blip
Gold prices started the day weaker with many traders prefering cash and stocks headed into the weekend. But stock markets lost steam after a report which said U.S. May retail sales declined 1.2% after analysts were expecting a 0.2% improvement. The news that the U.S. consumer is saving rather than spending spooked investors and they dumped stocks for gold. Gold prices are apt to stay volatile over the next week as they continue to look to the
oil spill and European Union countries for direction.
"Short-term gold remains at risk to ongoing pockets of long liquidation," says James Moore, analyst at
in his daily metals report. "We expect gold to find further support towards $1,200 with chart support below around $1,174."
The news Thursday that
China's May exports rose
almost 50% calmed jittery investors and the
Dow Jones Industrial Average
closed 273 points higher as investors dumped gold and rushed into equities. China, however, reported Friday that its Consumer Price Index rose 3.1% in May which was more than expected. The news could force China's central bank to take more money out of circulation to curb the risk of inflation. China has already raised the money banks are required to hold in its reserves multiple times this year to try to slow economic growth. Any further steps could weigh on markets and boost demand for gold.
Despite lower gold prices, the popular gold exchange-traded fund,
SPDR Gold Shares
, added almost 8 tons Thursday and now holds a record of 1,306 tons. Moore says this investor interest "continues to reflect the level of concern investors have towards the European debt situation and rising inflation indicators."
closed at $18.23 while copper prices settled 4 cents higher at $2.90.
Gold mining stocks, a more profitable and more risky way to
, were mixed.
was losing 0.71% to $42.15 while
was down 0.34% to $17.37. Shares of
were lower by 0.52% to $43.64 while
rallied 0.77% to $30.28 as investors speculated that copper demand in China would increase as the country's growth seemed unaffected by any slowdown in Europe.
Written by Alix Steel in New York
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.