NEW YORK (Reuters) - Gold rose but was off earlier highs on Friday as investors took profits after data showed that economic growth and consumer sentiment have weakened but not enough to prompt the U.S. Federal Reserve to take further simulative action.
Bullion was up 0.5 percent for the day and logged its biggest weekly gain in eight weeks, boosted by a pledge from the head of European Central Bank to preserve the euro and hopes that the Fed will explore new tools to promote growth in the U.S. economy.
After rising nearly 1 percent earlier in the session, gold trimmed its gains after data showed U.S. GDP slowed in the second quarter from the first quarter, and U.S. consumer sentiment in July fell to its lowest level of the year.
“We started off reasonably well carrying over from yesterday. But we have pared gains since then because the numbers are not as quite as disappointing, and some of the premium in the gold market has already built in,” said James Steel, metals analyst at HSBC.
Gold has gained 3 percent during its four-day rally. Better performance of the equities market this week, highlighted by Friday’s 2 percent surge on Wall Street, also lifted bullion.
The metal broke above its 100-day moving average on Thursday for the first time since May 1.
Spot gold was up 0.5 percent at $1,622.96 an ounce by 3:07 p.m. EDT (1907 GMT), after hitting a high of $1,629.10, which marked a five-week high.
A break above key chart resistance at around $1,640 an ounce could send gold back to the top of its intermediate-term range at $1,800 an ounce, said Mark Arbeter, chief technical strategist of S&P Capital IQ.
U.S. COMEX gold futures for August delivery settled up $2.90 at $1,618 an ounce.
Futures trading has been active all week. Friday’s trading volume at 300,000 lots, almost doubled its 30-day average, and was on track to be the highest turnover since June 1, preliminary Reuters data showed.
Analysts said that active trading a day after COMEX August options expiry and a decent contract rollover to December from August ahead of first-notice day next week suggest bullion could extend its rally.
Gold has been seesawing between $1,525 and $1,640 in the last three months, partly due to the Fed’s ambiguity on further monetary easing.
SICA Wealth Management Chief Investment Officer Jeffrey Sica said his firm, which has over $1 billion in assets, has accumulated significant amount of gold under $1,600 on hopes of Fed easing.
Physical gold traders in India, one of the top bullion consumers, stayed on the sidelines after prices stayed in the vicinity of their highest level in four weeks.
Among other metals, silver was up 0.7 percent at $27.68 an ounce from Thursday’s close, after hitting a three-week high of $27.85.
Spot platinum rose 0.4 percent to $1,405.75 an ounce. Its discount to spot gold increased to around $215 an ounce in the previous session, its deepest since early December. Spot palladium was up 1.6 percent at $573.75 per ounce.
Additional reporting by Susan Thomas in London; Editing by Marguerita Choy and Leslie Gevirtz