Gold retreats, risk appetite fades

Gold futures on the COMEX Division of the New York Mercantile Exchange failed to hold on to the gains from previous sessions on Friday, as the newly-gained strength in the U.S. dollar limited gold's advance, and traders dumped gold with other assets which are considered riskier. The most active gold contract for April delivery dropped 12.4 dollars, or 0.7 percent, to 1,709.8 dollars per ounce. The precious metal came under pressure on Friday, as the dollar jumped against the euro amid lingering concerns over the Eurozone debt crisis. A stronger dollar usually makes gold more expensive for holders of other currencies. Meanwhile, the dip in crude oil price also added to gold's woe, as worries about a supply disruption from Saudi Arabia, the world' s biggest crude exporter, eased, traders said. Higher crude prices are considered to be inflationary and " bullish" precious metals. The bullion lost 66.6 dollars, or 3.7 percent this week after Fed Chairman Ben Bernanke failed to suggest a third round of quantitative easing. "As gold bugs we should expect the volume and volatility to remain high due to geo-political and economic uncertainty. Trade smart use stop-loss orders or hedged positions as we live in uncertain time", said Mike Daly, a gold specialist with PFGbest here in Chicago. Silver for May delivery lost 1.136 dollars, or 3.2 percent, to 34.525 dollars per ounce.