Gold prices were dropping in value on Friday, tracking the downward dip of the shared currency of the European Union, according to published reports.
The 17-nation monetary unit was suffering from concerns about debt-hobbled banks in Spain, as the country was approved for bailout aid by euro zone finance ministers, The Wall Street Journal reports
The wobbly financial institutions will be on the receiving end of the euro equivalent of $123 billion.
While the bailout aid aimed to stabilize what presently is one of the euro zone's most vulnerable member nations, the monetary unit suffered the consequences, also from Spain releasing economic data.
The growth outlook for the next two years in Spain has been reduced. Rather than seeing 0.2 percent growth for 2013, which had been forecast, the nation is likely to see 0.5 percent contraction, The Wall Street Journal reports. And the following year, Spain is projected to see 1.2 percent growth rather than 1.4 percent.
In addition to borrowing costs in Spain scaling higher than 7 percent, the embattled monetary unit also dropped on Friday.
"The main driver for gold is the strong dollar and weaker euro. In the big picture, the gold market is disappointed not to hear about additional [quantitative easing] this week," broker and futures analyst Frank Lesh with FuturePath Trading in Chicago told
At 3:58 p.m. on Friday, gold prices gained 0.2 percent, a $3.20 lift to $1,538.60 per troy ounce.Bullion notches weekly losses
The yellowish metal's rough five days of trading sessions leading up to Friday resulted in losses of 0.6 percent this week, MarketWatch reports.
The emboldened U.S. dollar, which benefited earlier this week from U.S. Federal Reserve chair Ben Bernanke Capitol Hill testimony, also worked against the metal's performance this week, according to
Bernanke testified on Tuesday and Wednesday that the institution he leads is prepared to employ measures of stimulating the globe's largest economy yet he stopped short of committing to those proposed actions.
That, in turn, boosted the value of the dollar. By contrast, the precious metal slipped since the two typically perform the inverse of one-another.
But one metals trading administrator said buying opportunity is mounting.
"We continue to find some relatively significant support at levels below $1,570 as markets are viewing them as a buying opportunity. They will remain the near-term levels of support," director of metals trading David Meger with brokerage Vision Financial Markets told Reuters.Lack of Indian support
Also tugging down the price of gold this week was minimal support from the globe's largest consumer of the precious metal.
Indian farmers are unlikely to reap as much earnings as forecast because of monsoons, The Wall Street Journal reports.
"The folks most affected by a potentially dry summer rainy season constitute 66 percent of the country's typical gold buyers in a given year. Locals have actually been selling gold on approaches towards $1,580 in the yellow metal," senior metals analyst Jon Nadler with Kitco Metals Inc. North America told the news source.Good gold day
This past Thursday, bullion reversed three consecutive days of losses, Market Watch reports.
The Fed chief's two days of testimony ended on Wednesday, the day prior to increases for gold. His stating under oath that no stimulus program that benefits the economy yet weakens the dollar benefited the yellowish metal.
But Thursday's gains were comparatively low.
"Although the price of gold was likewise able to gain during the course of trading yesterday, the increase was disproportionately low. Continued (exchange-traded funds) outflows are evidence that gold is currently in lower demand," states a note penned by analysts with Commerzbank on Friday.