The Dollar price to Buy Gold on wholesale markets continued to rally Friday morning, rising as high as $1516 per ounce – less than 4% off this month's all-time high – before slipping back, while stock and commodity markets recovered some of Thursday's losses.
Silver Prices also continued their rebound on Friday morning, rising to $36.47 per ounce – a rise of nearly 12% from yesterday's 11-week low – before dipping back down towards $35.
"Despite the fact that gold prices have been driven primarily by the weakness/strength of the Dollar in recent weeks, concerns regarding the economic situation in Greece brought Europe back into focus," French investment bank and bullion dealer Natixis wrote in its weekly commodities note on Thursday.
The Euro price to Buy Gold held steady this week – even as Dollar gold moved sharply – trading in a tight range around €34000 per kilogram (€1055 per ounce)
The higher Euro Gold Price reflects "a renewed focus on Europe's sovereign fiscal problems," says Natixis.
"Ireland, Portugal and Greece will probably all need to restructure," reckons James Shugg, London-based senior economist at Westpac Banking Corp.
"They are continually going to need more and more bailout funds, and at some point the decision will be made to draw the line and get creditors to participate."
A poll published by Bloomberg on Friday suggests that 85% of investors and analysts using its data services believe Greece will default on its sovereign debt, while more than half responded that they also see Portugal and Ireland doing the same.
"All these countries will go bust at some stage," the newswire quotes Wilhelm Schroeder, fund manager for Schroeder Equities in Munich. "I just can't see a scenario in which these countries get out of their debt problems."
The price to Buy Gold in Pound Sterling meanwhile was £928.42 at Friday morning's London Fix – a 2% gain for the week and 1% off its all-time high set on May 3 – as the Pound fell against the Euro following better-than-expected GDP growth figures from Germany and France.
"The UK economy looks pretty lackluster compared to the likes of Germany and France, which supports the view that [interest] rates are going to rise faster in the Eurozone", reckons Neil Jones, head of European hedge-fund sales at Mizuho Corporate Bank. "That's going to keep the Pound among the laggards of the currency world."
Germany's GDP grew by 1.5% in the first quarter of 2011, while that of France was up 1%, according to official figures. UK GDP growth over the same period is estimated at 0.5%
Going into the weekend, gold in Dollars had gained around 1% by Friday lunchtime London time, while silver was almost exactly where it started the week.
"Silver is looking more and more like a bubble," said Saxo Bank senior manager Ole Hansen on Thursday.
Since hitting a peak of $49.63 on 25 April, spot Silver Prices have dropped as low as $32.44 – a 35% loss – leading one Hong Kong dealer to liken the market to "a pinball machine".
In Beijing on Thursday, the People's Bank of China (PBoC) raised commercial banks' reserve requirements for the fifth time this year. From May 18, commercial banks will have to hold reserves equivalent to 21% of customers' deposits.
"The room for further [interest] rate hikes is quite small this year on concerns of hot money and economic growth," reckons Lu Ting, economist for Bank of America Merrill Lynch in Hong Kong. "We surely expect more reserve requirement ratio hikes."
Meantime in India – the world's biggest market for physical gold – figures from Natixis suggest the demand from India to Buy Gold "could have increased as much as five-fold" in the weeks leading up to the Akshaya Tritiya festival on May 6.
"Since the start of May, physical gold demand has been strong, "adds Walter de Wet, London-based commodity strategist at Standard Bank." While consistent physical buying interest has come from India specifically, we are witnessing a broader interest from Asia in general."