After days of being battered downwards, gold futures rebounded Friday, rising $20 an ounce to finish higher for the week as a fall in the value of the US dollar fed a rally in commodity markets.

The euro trimmed gains as Spanish and Italian bond yields continued to edge higher.

The euro rose to $US1.3265 from $US1.3170.

The euro ended the week up 0.7% against the dollar.

The Aussie dollar rose past $US1.04 as well.

In New York, Comex gold for April delivery rose $US19.90, or 1.2%, to settle at $US1,662.40 an ounce.

Futures prices ended 0.4%, or $US6.60, higher for the week.

That is still a long way from the big losses of the previous week.

Silver also did well, following gold higher.

Comex May silver futures rose 93c, or 3%, to end at $US32.27 per ounce.

But that wasn't enough to stop the metal suffering a 1% loss for the week.

Comex copper for May delivery rose 4c, or 1.1%, to $US3.81 a pound.

But prices were down 1.8% for the week.

After the recent bout of weakness, a couple of leading investment groups have come out with positive outlooks for metals, including gold and copper.

Canadian group TD Securities sees short-term risks to precious and base metals but also says investors' "patience to be rewarded" in the longer term.

The firm cites slowing growth in China, higher taxes on gold imports in India and falling hopes of more US quantitative easing as short-term downside risks for gold.

And less-robust demand in China and any disappointments in US economic data mean risks for platinum, palladium, copper and other industrial metals.

Still, TDS describes the commodity picture as "positive" for the longer term.

"Supply constraints present in the palladium and copper markets will likely make these commodities join the group of the biggest winners this year," TDS says.

Meanwhile Barclays Capital expects gold to rebound by around 15% in the next couple of months to $US1,850 an ounce.

The reason, renewed worries about inflation.

And BarCap says copper should rise more strongly than many other commodities if the US economy and global business confidence continue to grow and China shows more proof that it's heading for a soft economic landing.

"At present, our favoured exposures in commodity markets include directional longs in copper and soybeans at the front end of their respective price curves," TDS says.

BarCap expects precious metals to be one of the commodity price leaders in the second quarter, citing the "resumption of the kind of currency debasement/inflation concerns that have been the big driver of gold and silver prices over the past 12 months".

Copyright Australasian Investment Review.
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