Gold rises on Russian central bank buying, ignores euro

Investing.com - Gold prices rose on Friday on reports the Russian central bank has been adding to its reserves of the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were up 0.29% and trading at USD1,584.95 a troy ounce, up from a session low of USD1,572.95 and down from a high of USD1,586.65 a troy ounce early during the session.

Gold futures were likely to test support at USD1,572.95 a troy ounce, the earlier low, and resistance at USD1,598.75, the high from July 17.

Soaring Spanish bond yields and talk of a bailout for Madrid sent the euro falling and gold's traditional hedge, the dollar, rising.

Such a combination normally would be bearish for gold, which often trades inversely with the greenback, though reports the Russian central bank has been stocking up on the yellow metal sent the commodity rising.

Eurozone ministers signed off on terms to give EUR100 billion bailout for its banking sector as well as for regional governments, though investors fear the country itself will need a sovereign rescue as well.

Still, the news eased demand for the dollar, which further gave gold room to rise, though a plunging euro capped gold's gains despite talk of Russian demand.

Gold fell in recent sessions after Federal Reserve Chairman Ben Bernanke gave no indication during congressional testimony that the economy is in greater need of monetary stimulus despite softening economic indicators, including monthly jobs reports that have continued to disappoint.

However, markets still anticipate credit easing on the part of the Fed later this year, which further bolstered the metal on Friday.

Easing measures weaken the dollar to spur the economy.

Elsewhere on the Comex, silver for September delivery was up 0.33% and trading at USD27.307 a troy ounce, while copper for September delivery was down 2.62% and trading at USD3.442 a pound.