Gold price takes breather, Tokyo gold strikes record high
Gold inched lower on Friday but was headed for its biggest weekly rise in more than a month, following a decision by the European Central Bank to keep rates unchanged despite signs of stabilisation in the battered economy.
Japan's gold market sprang into the spotlight as benchmark Tokyo gold futures hit a record high after the yen dropped to a 2-1/2-year low against the dollar on expectations of more monetary easing by the Bank of Japan.
Spot gold eased 0.1 percent to $1,672.94 an ounce, after rising 1 percent in the previous session when it tracked the euro rally after the ECB kept rates unchanged and said the euro zone economy would recover later in 2013.
Bullion was on track for a 1-percent weekly rise, after falling for five of the past six weeks.
US gold inched down 0.3 percent to $1,673.30.
"The record-high gold prices in yen have triggered some liquidation from Japanese customers, which is putting pressure on the market," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
Gold is likely to test the $1,700 level, and will find solid support at $1,660, around the 200-day moving average that it breached on Thursday.
Buying of physical gold from China continued to underpin market sentiment, as buying has picked up before the Lunar New Year, when sales of both jewellery and bars and coins rise during the festival in China.
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