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Reuters
SINGAPORE - Gold edged up as investors turned their backs on the euro on worries that belt-tightening in Europe will slow growth, but the metal lacked fresh momentum to surpass a recent record high.
Gold was heading for its fourth consecutive weekly rise, equalling a run that ended in late November. Bullion's safe haven appeal has increased on worries a $US1 trillion rescue package to prevent a Greek debt crisis from spreading to other euro zone states would eventually fail.
Gold was at $US1,235.50 an ounce by 1031 AEST, up $US3.67 from New York's notional close on Thursday. Bullion struck a record high of $US1,248.15 on Wednesday.
"The technical trend is intact even in the face of US dollar strength, which is amazing. Imagine what gold will do in the face of dollar weakness as gold priced in euro and weaker currencies is virtually hyperbolic," said Aaron Smith, head of Superfund in Asia.
"Once the market fully digests the enormity of the current credit expansion and free money policy which is funding bailouts for everything from banks to sovereign nations, it won't surprise us that gold will trading at $US1,500."
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings were unchanged at a record high of 1,209.499 tonnes as of May 13, which suggested that investors had little desire to book profits yet.
US gold futures for June delivery added $US6.6 an ounce to $US1,235.8 an ounce. Gold priced in euro and sterling held near an all-time high.
The euro dropped against the dollar on Friday as concerns grow about anaemic growth in the euro zone. The single currency has broken the bottom of its recent trading range near $US1.2610 and is expected to test key support near $US1.25.
"I think the market is watching the euro/dollar rates. People are talking about higher prices such as $US1,300. Investors still buy gold," said a dealer in Hong Kong. "We don't see much interest from the jewellery sector," he added.
Japan's Nikkei average fell 1.6 per cent on Friday, weighed down by exporters such as Canon Inc after US stocks slid on downbeat comments on the economy from company executives.
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