Gold price rises one percent on lower dollar

London (Feb 13)  Gold rose one percent on Friday, erasing a week of losses, as the dollar dropped on weaker than expected US economic data.

Spot gold rose to a session high of $1,234.60 an ounce and was up 0.9 percent at $1,233.55 an ounce by 1517 GMT.

US gold for April delivery edged up $13.00 at $1,233.70 an ounce. The United States was on a national holiday on Monday.

"We have the long weekend in the US, so we may continue to see some book-squaring throughout the day ahead of that," MKS SA head of trading Afshin Nabavi said. "We are in a holding pattern between $1,150 and $1,300 because there isn't enough clarity around when the Fed is going to be hiking interest rates and what is going to be happening with Greece," ING Bank senior strategist Hamza Khan said.

A weaker dollar supports gold by making the dollar-denominated asset cheaper for holders of other currencies.

But outlook for the dollar remained upbeat despite the current pause in its long-term rally, as many investors continued to price in an interest rate hike by the Federal Reserve some time this year.

Any hike by the Fed, which has kept rates near zero since 2008 to stimulate the US economy, could hurt demand for bullion, a non-interest-bearing asset.

Stronger global shares on Friday, lifted by hoped of a debt deal in Greece and robust growth figures from Germany, also kept gold's upside in check.

Holding in the SPDR Gold Trust GLD, the world's largest gold-backed exchange-traded fund, fell 0.23 percent to 771.51 tonnes on Thursday.

In the physical markets, Chinese buying remained stable ahead of the Lunar New Year holiday next week. Premiums on the Shanghai Gold Exchange traded unchanged on the day at $3-$4 an ounce on Friday.

Silver rose 2.9 percent to $17.27 an ounce. Platinum gained 1.1 percent at $1,207.50 an ounce, while palladium was up 1.8 percent at $786 an ounce.

Source: ARABnews