Gold for August delivery closed at $903.70 an ounce on the New York Mercantile Exchange, down 50 cents for the session. But it closed last Friday at $873.10, so it gained 3.5% for the week.
On Thursday, gold futures closed at their highest level in more than three weeks as concerns over global economies and a decline in South African gold production lifted prices by $10.70.
"Long- and short-term investors, with their eyes on the dollar and oil, took gold prices higher," said Julian Phillips, an analyst at GoldForecaster.com.
Higher oil prices have shrugged off a high-profile summit of oil producers and consumers set for this weekend in Saudi Arabia as well as China's move to hike fuel prices, while the dollar has become "anemic, sending gold up as it fell," he said in emailed comments.
"If good news for oil doesn't push it down, what will?" asked Phillips. "It seems the market doesn't want talk -- it wants action [and] until it gets it, the prospects are good for gold and silver."
In Nymex energy trading, crude futures closed higher, recouping part of the sharp fall in the previous session on the heels of weakness in the dollar and concerns about hostilities in the Middle East.
Crude futures had dropped nearly $5 a barrel on Thursday, retreating after China, the world's No. 2 consumer of oil, announced a surprise increase in fuel prices. "China's decision to hike fuel prices again reflects the level of concern toward inflation, and will continue to draw investment demand towards gold," said James Moore, an analyst at TheBullionDesk.com, in a research note.
Gold is typically seen as good hedge against inflation.
Price lid
Gold finished a "positive week and this momentum is likely to at least continue into the start of next week," said Peter Spina, an analyst at GoldSeek.com.
The key market drivers, the dollar and oil, are strongly favoring the gold and silver complex today, but "the price is not reacting as strong as one would expect as some overhead resistance around $900 is keeping a bit of a lid on an extended rally," he said in emailed comments.
Spina doesn't expect the "lid" to be able to hold the growing pressures for too long, he said. And "with sustained current conditions, the short-term gold price has the ability to make another solid run into the $900's."
Mixed base
Rounding out the action in the Nymex metals pits, July silver gave back 7.3 cents to close at $17.397 an ounce, but the contract was still 5% higher for the week, while September palladium closed flat at $479.20 an ounce, leaving it around 1% higher for the week.
July platinum gained $6.60 to finish at $2,062.40 an ounce, up 1.3% for the week. July copper futures rose 5.3 cents to close at $3.832 a pound -- up 6.8% for the week.
Copper looks like it has the "highs in its sights, but there is considerable supply overhead that might take some eroding," said William Adams, an analyst at BaseMetals.com, in a note to clients. "As such, we expect sideways/up choppy trading conditions to prevail."
