Gold fell on Friday, pulling back from a five-month high, as the euro hit an 11-year low against the dollar and shares rose after the European Central Bank announced a multibillion euro bond-buying program to revive the sagging euro zone economy.
The metal, often seen as a hedge against inflation, jumped more than one percent above $1,300 an ounce on Thursday after the ECB pledged to spend more than 1 trillion euros to boost growth and ward off deflation.
But prices have since pared some of those gains as the impact of a stronger dollar that makes dollar-denominated assets more expensive for foreign investors prevailed.
"Gold was completely dislocated from the dollar yesterday, meaning that euro-gold is the best performing commodity this year, helping dollar gold stay fairly stable around $1,300," Saxo Bank senior manager Ole Hansen said. "But that strength in the dollar is now proving too much."