Gold rose to a one-week high Friday, gaining 1 per cent, as uncertainty about currencies and debt-laden Greece lured investors to the metal as a safe haven.
Gold was 1.6 per cent higher for the week, as the market recovered following last Friday's selloff after U.S. regulators charged major commodities player Goldman Sachs Group Inc. with fraud.
Gold will keep taking cues from currency markets, driven by Greece and other possible sovereign debt downgrades, analysts said.
"With more questions on Greece's debt, people want to be in a hard currency now," said Adam Klopfenstein, senior market strategist at MF Global's Lind-Waldock unit.
"Even though the dollar has been a refuge of late, at some point people are starting to feel that the euro has come down more than it should be. People want to have their money in a metal such as gold," Mr. Klopfenstein said.
Spot gold was at $1,155.75 (U.S.) an ounce at 3:58 p.m. ET, against $1,140.45 late in New York Thursday.
U.S. gold futures for June delivery on the Comex division of the New York Mercantile Exchange settled up $10.80 at $1,153.70 an ounce.
Gold investors took heart as the euro turned higher against the dollar after Germany said it was ready to make a contribution to Greek aid.
Gold's underlying strength could be seen as bullion priced in non-U.S. currencies has been hitting new highs.
Euro-priced gold meanwhile hit an all-time high at €865.04 ($1,157.85) an ounce as Greece's appeal for emergency aid to the IMF and its European peers drew the euro zone's fiscal woes back into the spotlight.
The Greek debt crisis can be viewed as both positive and negative for gold, as it tends to pressure the euro, which is negative for dollar-priced commodities, but boosts interest in bullion as a haven from financial risk.
"The currency aspect [of the gold market]is more short term," said VM Group analyst Matthew Turner. "If there is a bailout, the euro will rise and gold will rise in dollars, and if the situation gets worse, we will see gold under pressure."
"But in the medium term, this uncertainty is good for gold, even though it is bad for the euro. As there doesn't seem to be a quick solution to the problem, it is something that will keep gold supported over the rest of the year."
The link between the dollar and gold has weakened in 2010, with gold prices rising 4 per cent since the start of the year despite the dollar's 7 per cent climb against the euro.
Prices also received a boost after above-consensus U.S. new homes data lifted appetite for assets seen as higher risk, such as the euro and commodities. Concern over Greece pushed the single currency to one-year lows in earlier trade.
Wall Street climbed as both the S&P 500 and the Dow Jones industrial average closed at a 19-month high.
However, trading volume in gold has dropped this week, indicating market interest might be fading due to a lack of definite direction in the price of bullion.
Silver was at $18.23 an ounce against $17.95 late in New York on Thursday, platinum at $1,738.50 an ounce against $1,740, and palladium at $560 against $561.