Gold recovers as dollar further dips

Gold futures on the COMEX Division of the New York Mercantile Exchange rebounded on Friday, as U.S. dollar lost more ground against other major currencies, increasing the appeal of gold as an alternative asset.

The most active gold contract for February delivery jumped 9.5 dollars, or 0.6 percent, to 1,664 dollars per ounce.

Investors closely followed talks between the Greek government and private creditors, which continued on a third day in an effort to reach a crucial agreement to write down debt, traders said. The talks broke down last Friday, raising concerns that Greece would miss another multibillion-euro bailout.

The U.S. dollar continued to decline as the euro recovered, sending the dollar-denominated gold higher as a weaker dollar makes it more affordable to holders of other currencies.

Meanwhile, some market participants worried that the interest in gold market may dwindle a little bit in the short-term, as gold buying in China was set to ease when the Lunar New Year celebrations get underway.

Silver for March delivery surged 1.166 dollars, or 3.8 percent, to 31.675 dollars per ounce. Platinum for April delivery rallied 14.3 dollars, or 0.9 percent, to 1,532.3 dollars per ounce.