Gold Fights Through Waves of Bad News to Close up

Gold prices fought back Friday against a powerful downdraft of worry about Europe's currency, prosperity and even unity to end the day in positive territory.

The yellow metal was one of the few investments that posted gains as investors were forced to absorb one piece of bad news from Europe after another.

The resignation Friday of Juergen Stark, an executive board member of the European Central Bank, was reportedly prompted by disagreements over the central bank's bond-buying program, said Reuters.

His departure underscored the perception that the continent's leaders simply can't agree on a way out of the sovereign debt crisis that started with Greece and now threatens Portugal, Ireland, Spain and Italy -- as well as all European banks holding the debt of those countries.

Investors also were on tenterhooks over whether private creditors will accept a $220 million Greek debt swap and rollover that aims to help the nation avoid default. Failure to get at least 90 percent participation could trigger a default over the weekend.

The Organization for Economic Cooperation and Development on Thursday forecast that growth across the G7 economies would average 1.6 percent on an annualized basis in the third quarter and slow to 0.2 percent in the last quarter of 2011, a sharp slowdown from its May outlook.

Besides the clouds over Europe, the market seemed indifferent to President Barack Obama's jobs program speech Thursday night calling on Congress to pass a package of tax cuts and spending hikes.

The upshot of all the negativity was a stock market that tumbled. In late afternoon trading, equities on all three major indexes fell more than 2 percent.

Early in the trading session gold also fell but by early afternoon it had clawed its way back on safe-haven buying and bargain hunting.

It ranged from a low of $1,825.50 to a high of $1,889.10 before settling at $1,859.50, a gain of $2 on the day.