Gold dropped on Friday as the US dollar rose to new recent highs on worries about Greece, a slowing European economy and the surprise move by China to tighten bank lending.
Spot gold ended around as at $US1092 an ounce in New York trade, down from nearly $US1096 on Thursday.
Comex April gold futures ended $US4.70 down at $US1090 an ounce.
It earlier fell to a low of $US1,078.10 an ounce
For the week, the precious metal rose 2% over the week, partially recovering from a two-day sell-off in the face of fears for some European countries.
The dollar index, which tracks the performance of the US dollar against a basket of other major currencies, rose 0.3% to 80.30 and helped push gold and other commodities lower.
The Australian dollar finished around 88.80 US cents on Friday night.
That saw it up around 2% against the greenback over the week.
But it closed very strong against the euro.
At the local close of trade in Australia, the Aussie was at 65.11 euro cents, up from Thursday’s close of 64.39.
It closed at 65.12 euro cents in New York trading.
In euro terms, the currency ended at $A1.5356, in sight of a 10-year low of $A1.5330 hit offshore on Thursday.
The dollar reached an eight-month high versus the euro on Friday, following weak data on Europe’s economy and the continued lack of clarity over Greece rescue plans combined with a surprise Chinese reserve-ratio hike.
Against the greenback the euro fell to $US1.3609 from $US1.3688.
It earlier touched $US1.3531, the shared currency’s worst level since May.
The four-day rally in oil prices ended Friday after China’s reserve tightening.
Nymex March crude fell $US1.77 to $US73.50 a barrel.
In London, Brent crude was down $US1.68 at $US72.44.
Data released Friday by the Energy Information Administration showed that US inventories of crude and gasoline rose last week and supplies of distillate fuel used for heating oil and diesel fuel dropped less than expected.
But analysts pointed out that US stocks of distillates used for heating oil and diesel fuel were at their highest levels at the end of January since 1983, and that’s despite the record snowfalls in the Midwest and north east states of the US and the very cold weather last month in northern Europe.
Prices were not impacted by a surprise lift in oil demand in the latest forecast from the International Energy Agency (IEA).
The IEA made an optimistic revision to its oil demand forecasts for this year, saying it now expects the world to need 86.5 million barrels of oil a day, up 1.8% from last year.
Just a month ago the IEA said it expected global daily demand to be 86.3 million barrels next year.
The Agency said it expects all of the incremental demand to come from developing nations, mainly in Asia.
Copper fell Friday with the stronger greenback and the latest monetary tightening moves in China.
That news sparked renewed worries about near-term demand prospects in the world’s top metals consumer.
These fears were raised Thursday when trade figures showed that copper imports into China fell in January, the second monthly fall.
March Comex copper fell 5.10 USc, or 1.6%, on Friday to finish at $US3.0825 per lb.
On the London Metal Exchange (LME) copper for three-month delivery ended at $US6,810 a tonne, down $US130 from Thursday.
While copper imports into China last month were up 25% on January 2009 (when they were depressed by the GFC), they were still down 21% from December.
Copper is down around 10% so far this year as doubts about China and moves to restrict the trading activities of major banks have hit prices.
