· Gold edged higher on Friday, reversing earlier losses after the Catalonian parliament's independence declaration from Spain led investors to seek safety from political upheaval.
Spot gold was up 0.3 percent at $1,270.36 an ounce by 2:02 p.m. EDT (1802 GMT), heading for its second consecutive weekly decline. Gold had earlier dropped to a three-week low of $1,263.35.
U.S. gold futures for December delivery settled up $2.20, or 0.2 percent, at $1,271.80 per ounce.
· Catalonia's declaration was in defiance of the Madrid government, which was preparing to impose direct rule over the region.
“Catalonia is a small microcosm of the total European situation. But what it represents is the idea of an unstable European Union," said Dan Huffey, senior market strategist at RJO Futures in Chicago.
"(These are) all reasons why we would look for a safe haven like gold to rally," he added.
· "Gold went up on the back of the Catalonia independence, but I still think it's not going to last long because the dollar is still trading at high levels," said Forex.com analyst Fawad Razaqzada.
· The dollar index came off its session high on a Bloomberg report of U.S. President Donald Trump eyeing Federal Reserve Governor Jerome Powell as his pick to head the U.S.central bank.
Yet, the greenback was still trading near a three-month high, limiting gold's gains as it makes dollar-priced commodities costlier for non-U.S. investors.
· According to a Politico report, Trump's search for the next Fed chair has come down to Fed Governor Jerome Powell and Stanford University economist John Taylor.
"The market is not pricing in more aggressive rate hike from the Fed even given a potential change in leadership next year. We are likely to see the same rate hike path," ETF Securities commodity strategist Martin Arnold said.
· Silver rose 0.1 percent at $16.77 per ounce.
Reference: Reuters
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