Daily Gold Update

Source: Marketwatch

New York— Gold futures rallied on Friday, as declines in the U.S. dollar and rising crude-oil prices supported investment demand. February gold rose $11.50, or 1.4%, to $814.70 an ounce on the New York Mercantile Exchange. Earlier, the contract hit an intraday high of $816.20.

"Gold prices are higher on the back of speculation that the U.S. dollar may weaken into 2008, which boosts the appeal of gold as a hedge against inflation and makes it cheaper for foreign investors," said analysts at Action Economics. The dollar gained on the yen but gave up a bit of ground to other major rivals in thin pre-holiday market conditions, despite strong U.S. consumer spending data and a higher-than-expected year-over-year core inflation figure that suggested the Federal Reserve has less leeway to further cut interest rates.See full story.