NEW YORK/LONDON: Gold rose 1 percent on Friday, breaking a four-day losing streak, as bullion moved in sync once again with riskier assets on optimism European leaders will be able to contain the region's debt crisis.
Gold is poised to record its biggest one-day gain in two weeks as Wall Street and commodities rallied after France and Germany said the euro zone's two biggest powers would meet twice -- on Sunday and Wednesday -- to prevent the crisis from engulfing the 17-nation currency area.
The metal was 3 percent lower for the week, set for its biggest decline in four weeks, largely moving lower in tandem with riskier assets including equities and industrial metals as divisions remained between Paris and Berlin on how to strengthen the EFSF bailout fund.
"It's not surprising to see buyers begin to step in here out of concern that they would miss an opportunity for another (rally)," said Mark Luschini, chief investment strategist at broker-dealer Janney Montgomery Scott, which has $54 billion in assets under management.
"I expect to see gold doing better from here," he said.
Spot gold was up 1 percent at $1,634.79 an ounce by 11:10 a.m. EDT (1510 GMT).
US gold futures for December delivery rose $23.50 to $1,636.40 an ounce.
Gold has increasingly performed like a risk-linked commodity. Bullion's unusual positive correlation with the S&P 500 stock index has risen to its strongest in four months, and the metal's positive link with bellwether industrial metal copper has climbed to its tightest in almost a year.
Bullion accelerated gains earlier in the session after sources at the German government said there are no serious differences between Germany and France.
The metal also benefited as the dollar fell nearly 1 percent against major currencies as investors' risk appetite grew ahead of the EU summit.
Silver, which can move in lockstep with gold but more frequently tracks base metals, is on track for a 3 percent decline this week. It was last up 1.7 percent at $31.01 an ounce.
Palladium rose 4.6 percent on the day to $610.33. The price is down 1.0 percent this week as concern has increased over the outlook for demand, particularly following a soft reading on Chinese economic growth, which is key for car sales in the world's largest auto market.
Palladium relies heavily on China as a source of demand for the metal in catalytic converters fitted in gasoline-powered vehicles.
Platinum was up 0.8 percent at $1,502.99 an ounce.
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