Gold hits 13-month top on firm euro as ECB signals end to rate cuts

Spot gold rose $1,282.51 an ounce, its strongest since February 3, 2015

Gold climbed to a 13-month high on Friday before pulling back slightly, as the euro hovered near a three-week peak against the dollar after the European Central Bank signalled it was done reducing interest rates for now.

After rolling out bold measures to boost the euro zone economies, including increased asset buying and a deeper cut to deposit rates, ECB President Mario Draghi on Thursday signalled there would be no further rate cuts.

Spot gold rose as far as $1,282.51 an ounce, its strongest since February 3, 2015, and was little changed at $1,270.20 at 0706 GMT.

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Bullion climbed 1.5% on Thursday, its biggest single-day gain in a week, and was on course for a second weekly rise. For the year, gold has added 20%.

US gold for April delivery eased 0.1% to $1,271 an ounce, after peaking at $1,287.80.

The next major resistance level for gold would be around $1,308, reached in January last year, said Ric Spooner, chief market analyst at CMC Markets in Sydney.

"Ultimately if this trend continues, we may well see ourselves up towards $1,400 in gold," he said.

The relatively weak US dollar, despite expectations that the US Federal Reserve could raise interest rates this year, as well as concerns about a wobbly global economy should support gold prices going forward, said Spooner.

"Gold remains our preferred commodity/sector in view of increasing liquidity from global monetary easing," Argonaut Securities analyst Helen Lau wrote in a research note.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to 25.68 million ounces on Thursday, the highest since August 2014.

With the metal clinging to this year's gains, physical gold demand slowed in top consumer China this week, while a strike by jewellers protesting against the imposition of a tax curbed demand in No 2 market India.

Spot silver slipped 0.3% to $15.54 an ounce, platinum added 0.2% to $977.99 and palladium gained 0.3% to $572.40.