Gold Futures Advance

April bullion is up $6.80.
Publish date:

Updated from 12:21 p.m. EDT

Gold prices rallied Friday after a mixed bag of economic data left the dollar down against other major world currencies.

April-dated bullion contracts added $6.80 to close at $653.90 an ounce on the Comex division of the New York Mercantile Exchange. The bullion exchange-traded funds that hold the metal were up also, with

streetTracks Gold Shares

(GLD) - Get Report

adding 1% and

iShares Comex Gold Trust

(IAU) - Get Report

ahead by 0.9%.

Industrial production jumped much more than the consensus forecast in February, according to new government statistics. Other fresh data showed core consumer prices growing as expected last month and consumer sentiment dipping in March.

"Our general view is that the dollar is heading lower," says Martin Murenbeeld, chief economist with the financial services firm Dundee Group in Victoria, British Columbia.

"The news on industrial production doesn't really change that," he adds, explaining that the current trade flows resulting in large deficits will eventually result in a devaluation of the greenback.

Recently, one dollar was buying 116.765 yen, down from 117.56 yen late Thursday. The euro was buying $1.3316, up from $1.3237 previously. The relative values of gold and the U.S. currency tend to move in opposite directions over time.

In other economic news, the weekly leading index grew 3.7%, compared with a rise of 3.3% in the prior period, according to the Manhattan-based Economic Cycle Research Institute, which publishes the indicator.

The reading suggests a robust U.S. economy in the months to come and, depending on exactly how strong business activity is, a possible change in interest rates by the

Federal Reserve

. A potential hike could lead to a dollar rally.

Back in gold, one chart watcher sees a consolidation period ahead, at least for a while.

"Gold remains quite heavily oversold here," writes Clive Maund, a Chile-based technical analyst, in a recent report. "Barring a sudden

U.S. military attack on Iran, it is considered likely that it will remain around current levels for some weeks yet."

Turning to the miners,

Barrick Gold


is said to be mulling a bid for

Newmont Mining

(NEM) - Get Report

, according to a report in

Business Week


Shares of Newmont were rallying 1.9%, while those of Barrick were off fractionally.

As for base metals, copper contracts edged up 2 cents to $3.01 a pound on the Comex. Shares of miners

Phelps Dodge

(PD) - Get Report


Southern Copper


were mixed.