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Gold set for fifth week of gains, palladium hits record

Reuters  |  NEW YORK/LONDON 

By and Zandi Shabalala

NEW YORK/(Reuters) - hit a four-month high on Friday and was on track for a fifth straight weekly gain as the fell against the euro on an agreement for a political coalition in

hit a record high in a continued rally fuelled by tight supplies and increased demand in the automotive industry for autocatalysts in gasoline-burning vehicles.

Spot was up 1.2 percent at $1,338.39 an by 2:19 p.m. EST (1919 GMT). The session high of $1,339.31 was its highest since September. Bullion is up 1.4 percent this week and set for its longest run of weekly gains since April.

U.S. futures for February delivery settled up $12.40, or 0.9 percent, at $1,334.90 per

rose 3.4 percent to $1,120.24 per and was up 2.8 percent for the week. During the session it hit a record high of $1,126.30.

prices extended their rally after U.S. said he would waive nuclear sanctions against for the last time to give and its European allies a chance to fix the "terrible flaws" of the 2015 nuclear deal. "This is a last chance," Trump said in a statement, which fed investor worries and boosted safe-haven demand for

"Certainly, Trump making that announcement helped, and it's been a risk-on move today," said Dan Hussey, at in

The dollar index <.DXY>, fell against a basket of currencies to its lowest since Sept. 8.

The euro jumped to a three-year high after party sources said German Angela Merkel's conservatives and the Social Democrats (SPD) had agreed a blueprint for formal coalition negotiations.

"The agreement is one of the first movements in a long time that people say is EU-positive. Hence the strength in the euro and gold, as well," Hussey added.

A stronger euro makes dollar-priced bullion cheaper for European investors.

The saw some pressure from falling prices in the in December, as underlying U.S. consumer prices recorded their largest increase in 11 months.

Both U.S. data reports tempered inflation worries.

has seen a sustained rally from high demand in the auto industry and a supply deficit, a New said.

"It's spiking, but is starting to follow it higher," he added.

rose 1.1 percent at $994.90 an after touching its highest since Sept. 11 at $998.50, on track for a fifth straight weekly gain. is up 2.6 percent so far this week.

Spot silver rose 1.4 percent at $17.20 an but was still heading for its first weekly loss in five weeks, down 0.1 percent for the week.

(Additional reporting by in Bengaluru; Editing by and David Goodman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Sat, January 13 2018. 01:32 IST