Gold rose as the US dollar declined against the euro, prompting more buying of the dollar-denominated metal in Europe.
Prices have risen 18 percent in the past year, boosted by weakness in the dollar and expectations that a war in Iraq would increase demand for the metal as a haven. The dollar fell against the euro for a third time this week and has lost 20 percent of its value against the European currency in the past year.
"New buying has come in with the dollar weakening," said Frank McGhee, head trader at Alliance Financial LLC, a gold-trading company in Chicago.
"We're predominately trading on the dollar" after the rally spurred by war fears was deemed "overdone," he said.
Gold for April delivery rose US$4.10, or 1.2 percent, to US$350.30 an ounce on the Comex division of the New York Mercantile Exchange. Prices still fell 0.4 percent for the week.
Gold-mining shares also climbed. The Philadelphia Stock Exchange Gold & Silver Index of 11 mining companies rose 2.4 percent to 71.99. Shares of Denver-based Newmont Mining Corp, the world's largest gold producer, rose US$48, or 1.8 percent, to US$27.33 in New York Stock Exchange composite trading.
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