Euro Touches Best Level Ever - TheStreet

Euro Touches Best Level Ever

Gold futures are higher.
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Precious metals prices were rallying Friday after poor economic growth figures sent the dollar to an all-time low against the euro.

Contracts for June delivery of gold were tacking on $2.90 at $680.90 an ounce, while July silver was adding 12 cents at $13.58 an ounce in recent New York trading.

The metals exchange-traded funds,

iShares Comex Gold Trust

(IAU) - Get Report

and the

iShares Silver Trust

(SLV) - Get Report

, were up 0.5% and 1%, respectively.

The Commerce Department says the U.S. economy grew at only a 1.3% annual pace during the first three months of the year, according to its advance estimate. The figure marks a decline from 2.5% growth during the prior period, and was also lower than the consensus estimate of 1.8%.

Foreign exchange dealers quickly bid down the greenback. One euro was recently buying $1.3664, slightly off from the intraday record high of $1.3682, but up from $1.3602 late Thursday. One dollar was trading for 119.26 yen, down from 119.62 yen previously.

The weakness in the U.S. currency helped buoy the price of gold and silver. Some investors purchase precious metals as a hedge against expectations of the declining value of paper money.

Still, some die-hard bulls see hope in the economic numbers. "The growth story

is not so bad as it looks, as drags from housing lessened and business investment rose," writes T.J. Marta, a fixed-income strategist at RBC Capital Markets in New York, in a research report.

The same Commerce Department report also gave worrying news of burgeoning inflation, with the chain deflator showing a jump of 4% vs. a forecast of 3.2%. Gold bulls will also be warmed by such news, as some investors purchase bullion as a hedge against a generally rising level of consumer prices.

Even so, Marta remains optimistic. "Rising inflation is not new news, and we expect it to soften going forward," he says.

In the gold patch, the

Market Vectors Gold Miner

(GDX) - Get Report

ETF, which tracks a basket of precious-metals stocks, was climbing 0.9%.

As for base metals, copper prices were rising 3 cents at $3.54 a pound on the Comex, fueled by the weaker dollar.

Elsewhere, after the close Thursday,

Century Aluminum

(CENX) - Get Report

reported first-quarter net income of $1.87 a share, reversing a loss of $4.39 in the same period a year earlier. Analysts had been expecting $1.95.

Operating earnings at the company were in line with expectations, but due to the accounting treatment on its convertible debt, a higher share count reduced the fully diluted number, explains Amir Arif, an analyst at Friedman Billings Ramsey in Arlington, Va.

The stock was recently dipping 1.1%.