Gold prices were edging ahead Friday as a decline in the U.S. dollar relative to Europe's common currency bolstered demand for the metal.
Bullion for delivery in August was up 50 cents at $654.70 an ounce -- it had been nearly $5 higher -- on the Comex division of the New York Mercantile Exchange.
The exchange-traded funds that track the metal,
streetTracks Gold Shares
iShares Comex Gold Trust
PowerShares DB Gold
, were all up around 0.3%.
Foreign-exchange investors tend to be influenced by expectations of yield returns in different currencies. So projections of reduced yields in the U.S. fixed-income market would naturally put pressure on the greenback.
One euro was recently buying $1.3456, up from $1.3386 late Thursday. The price of dollar-denominated assets, such as precious metals, tends to rally when the value of the dollar falls.
Meanwhile, the yen was weakening slightly to 123.84 from 123.66.
Worth noting is that the yen is trading at its lowest point in more than four years against the dollar and its weakest level ever against the euro. The are "near unjustifiable levels," writes Ashraf Laidi, chief foreign-exchange strategist at CMC Markets in New York. "Japan's economic growth is
at a level that justifies the deteriorating selloff."
CurrencyShares Japanese Yen Trust
was slipping 0.3% in recent action.
In the mining patch, the Amex Gold Bugs Index, which tracks a basket of precious-metals stocks, was rising 0.2%.
Elsewhere, sugar was rallying more than 1% at 9.7 cents a pound, while wheat was tumbling 1.3% to $6.14 a bushel.
Citigroup gave fertilizer maker
an upgrade to a buy rating from hold and pegged a price target of $55 on the stock, which was recently trading around $45 a share.