Gold Prices End Erratic Week Higher
NEW YORK (AP) — Gold prices settled slightly higher Friday after an economic stimulus plan announced by President Bush failed to soothe recession worries, boosting the metal's appeal as a safe investment.
Energy prices rose, and agricultural futures ended mostly lower.
Gold prices swung almost $50 this week, rocketing to an all-time high of $916.10 Tuesday and plunging to $870.60 Friday ahead of Bush's remarks. Later, an ounce of gold for February delivery climbed $1.20 to settle at $881.70 on the New York Mercantile Exchange.
"The market's been kind of volatile today," said James Steel, analyst with HSBC in New York. "We're still in an overall correction phase. It's been hard to get upside traction."
Gold breached $900 an ounce for the first time last week. It has soared during the past year on its appeal as a hedge against inflation and as a safe investment in times of political and economic uncertainty.
Gold prices inched up after President Bush endorsed a $145 billion economic stimulus plan designed to fend off a recession. The announcement failed to console investors, adding to gold's appeal as a hard asset known for holding its value.
Bush said the plan must include tax incentives for business investment and speedy tax relief for individuals, most likely in the form of one-time rebates.
Federal Reserve Chairman Ben Bernanke on Thursday backed the idea of a rescue package, but did not endorse a specific plan.
The call for economic intervention comes amid mounting worries that a prolonged housing slump and tight credit market will force consumers and businesses to tighten their purse strings, sending the country into its first recession since 2001.
Word of the stimulus plan boosted the dollar Friday, weighing some on commodities prices.
A higher dollar can make commodities less attractive as an alternative investment, and can also dampen demand from foreign buyers as their currencies weaken.
The euro fell to $1.4621 against the dollar in late afternoon trading.
