Gold rallies to end week at $1,540
Gold prices rallied at the end of the week as the US dollar, which is seen as an alternative asset to the yellow metal, declined sharply amid strength in the euro.
Europe's single currency surged on optimism that Greece's debt problems will be resolved and a default will be prevented. Following a meeting with French President Nicholas Sarkozy, German Chancellor Angela Merkel said that the private sector should be involved in any new financial aid package for Greece on a voluntary basis.
This signalled a departure from Germany's demands that private bondholders should share the risks and roll over expiring Greek bonds.
The European Union's top economic official Olli Rehn helped lift sentiment, saying in an interview with Bloomberg that the EU will not let the euro area "face any kind of catastrophe". He express confidence that Greece will receive the next payout of €12 billion and the EU will agree on a new bailout for Greece in July.
Gold ended the week at US$1,540/oz, up from US$1,532/oz a week ago. Silver declined from US$36.20/oz to US$35.90/oz and platinum dropped from US$1,826/oz to US$1,751/oz.
Major mining stocks were in decline this week. Randgold Resources (LON:RRS) retreated from 4,808 pence to 4,679 pence.
Lonmin (LON:LMI) slipped from 1,469 pence to 1,404 pence and Fresnillo (LON:FRES) dropped from 1,381 pence to 1,329 pence.
FTSE 250 constituent African Barrick Gold (LON:ABG) fell from 407 pence to 395 pence.
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