Dollar prices to buy gold hovered just below $1,680 per ounce Friday morning in London – back at levels last seen 10 days ago – as stock markets and industrial commodities ticked lower and government bonds gained.
A day earlier, gold prices jumped 1.6% during US trading – holding onto most of those gains during Friday's Asian session despite the release of lower-than-expected Chinese growth figures.
"We have now closed well above the short-term bear channel," reckon technical analysts at bullion bank Scotia Mocatta.
"The previous resistance level at $1,656 should provide some support," they add, citing current resistance at $1,680.
"[Gold] options activity this week suggests something is brewing," adds a note from investment bank UBS.
"There has been a good deal of interest in upside options, particularly for $1,800 June calls, with gold's safe haven performance on Tuesday the likely catalyst."
Tuesday saw gold gain while stock markets fell.
Heading into the weekend, the cost to buy gold in dollars was heading for a 2.2% weekly gain by Friday lunchtime in London.
Silver prices meantime held steady just below $32.50 per ounce during Friday morning's London trading – heading for a 1.6% weekly gain after posting gains in Thursday's US session.
CME Group, which operates the New York Comex futures and options exchange, has said it will cut its margins on silver futures for the second time since February.
China – the world's second largest source of private gold bullion demand last year – saw its economy grow at its slowest rate in nearly three years during the first quarter of 2012, according to official data published Friday.
Gross domestic product grew 8.1% in Q1 compared to the same period last year, lower than most forecasts. And down from 8.9% growth in the final quarter of 2011.
"What's clear is that the economy is still decelerating and the property sector clearly is deflating," says Yao Wei, Hong Kong-based China economist at Société Générale.
"It seems that property investment has finally started to correct. I think this trend will continue and will drag growth even lower in coming months so we don't think this is the bottom yet. It means more monetary easing will be needed to prevent a sharper deceleration."