Though the European Central Bank bought Spanish government bonds in the secondary market on Thursday, the yield was sustained at high enough levels to remind investors of dangers that appear imminent. Once government bonds touched the 7 percent threshold in Ireland, Greece and Portugal, those euro zone nations pursued emergency bailout aid.
"There is a strong argument that this euro crisis should support gold, especially if the solution to it will involve printing money and easing monetary policies, which are inflationary measures," analyst Matthew Turner with Mitsubishi told Reuters. "On the other hand these big shocks are making investors nervous."
At 7:53 a.m. on Friday, gold futures increased 0.85 percent, a $14.70 rise to $1,734.90 per troy ounce.
Dow Jones Newswires reports Spain had no choice but to pay an average yield of 6.975 percent on 10-year bonds, totaling the equivalent of $4.8 billion-worth of bonds on Thursday.
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