Gold prices eked out small gains on Friday on the back of a weaker dollar and as traders sought bargains after the previous session's sell-off and as the first quarter neared its end. Bullion was set to end the quarter up 6.6 percent, having outperformed the 1.7-percent drop in the dollar index and recovering from its drop in the fourth quarter, its first quarterly decline in three years.
Gold's gains for the quarter were well below those of other precious metals. Platinum was set to rise almost 17 percent while silver was headed for a 16 percent gain in the quarter. For the day, spot gold rose 0.47 percent to $1,668.77 an ounce at 2:50 pm EDT (1815 GMT), trading in an unusually narrow $10 range ahead of the end of the first quarter.
US gold futures for June delivery raced higher than spot prices, rising 0.92 percent to $1,670.1 an ounce. They settled at $1,671.9, up from $1,654.9 on Thursday. George Gero, senior vice president of RBC Wealth Management, attributed the rise, albeit small, to bargain hunting with traders betting on a flurry of new asset allocation into gold at the start of the second quarter.
It has been a volatile week for gold. After failing to pierce the $1,700 per oz mark ahead of options expiry, prices fell sharply to around $1,650 per oz on Thursday, close to support levels. Bullion garnered support as the dollar fell to a one-month low against a basket of currencies, including the euro, after European finance ministers agreed to boost the euro zone's debt crisis firewall to roughly 800 billion euros ($1.1 trillion).
In contrast, silver's fortunes have improved. The 16-percent rise this quarter is the industrial metal's first positive quarter since the first three months of last year. It is also the third-best performance among the commodities behind gasoline, up 26 percent, and platinum, up 17 percent. Silver was up 0.56 percent at $32.39 an ounce. The gold/silver ratio, or the number of silver ounces needed to buy an ounce of gold, eased back towards 51 on Friday. Spot platinum was up 0.77 percent at $1,635.49 an ounce, on track for its biggest quarterly rise in three years, up 17.6 percent. Palladium was up 0.74 percent at $647.73 an ounce.