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NEW YORK — Gold prices closed slightly higher Friday, finishing the week with a gain amid signs that a drop in consumer prices is moderating.
Energy and agriculture futures retreated.
The Labor Department said consumer prices were flat in April after dipping 0.1 percent in March. While the improvement was modest, it did ease some of the market's concerns about rapidly falling prices, or deflation.
Investors are mindful that as the economy improves, buoyed by the government's massive stimulus efforts and the steady flow of money into the financial system, inflation could reignite. Part of gold's appeal is that it shelters investors from the potentially damaging effects of inflation on other assets, like the dollar. So any sign that prices are stabilizing tends to give gold a boost.
However, the dollar was higher against other major currencies Friday, which muted some of the gains in gold. Inflation can be triggered by a weak dollar.
With any threat of rapidly increasing prices still a long way off, investors have been reluctant to lift gold prices much further until the economy's future becomes more clear.
"The market wants to move higher, but there's some hesitation there," said Rob Kurzatkowski, futures analyst with OptionsXpress. "You'd be hard-pressed to find anybody that long-term doesn't think inflation is going to become a major concern, but it's now a question of how quickly it's going to come."
Gold for June delivery added $2.90 to settle at $931.30 an ounce on the New York Mercantile Exchange. Prices finished higher for the second straight week, adding 1.8 percent on top of a 3 percent gain last week. For the year, gold is up 5.3 percent.
July silver shed 3 cents to $14.01 an ounce, while July copper futures dipped less than a penny to $2.0175 a pound.
On Wall Street, investors sent stocks moderately lower. The economy remains deeply troubled despite signs that its decline is slowing, and investors have become more uncertain in recent sessions that the market's two-month spring rally was justified. Investors had grown more optimistic about the economy in recent months, sending the benchmark Standard & Poor's 500 index up more than 30 percent since early March.
"There is so much indecision in every market," Kurzatkowski said. "Some things look up but there is always something to counterbalance your view. Traders are becoming kind of jittery again."
Oil prices pulled back on the Nymex on Friday after their recent upswing.
Light, sweet crude for June delivery dropped $2.28 to settle at $56.34 a barrel.
Gasoline futures fell 4.31 cents to $1.6806 a gallon, while heating oil futures fell 7.55 cents to $1.4456 a gallon.
Grain prices fell on the Chicago Board of Trade.
July wheat futures dropped 15.75 cents to $5.7750 a bushel, while corn for July delivery lost 11 cents to $4.1725 a bushel. July soybeans fell 17 cents to $11.3050 a bushel.
