The dollar extended losses against the euro today after Germany said it was ready to make a contribution to Greek aid package and German business confidence beat forecasts.
The euro advanced 0.5 per cent to $1.3365, from $1.3295, after touching $1.3202, the lowest level since April 30th, 2009. The euro gained 1.5 per cent to 125.82 yen, from 124.28 yen.
Germany's finance minister said the country is ready to make its contribution to an aid package for Greece if the International Monetary Fund, the EU Commission and the European Central Bank decide Athens needs the help.
The greenback was headed for its first five-day rally in three weeks versus the yen, appreciating 2.2 per cent on signs of US economic strength. The euro has decreased 1.4 per cent versus the dollar this week.
Gold rose more than 1 per cent to a session high of $1,154.35 an ounce.
Spot gold was bid at $1,152.55 an ounce at 1503 GMT, against $1,140.45 late in New York yesterday. US gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose $10.80 to $1,153.70 an ounce.
The Greek debt crisis can be viewed as both positive and negative for gold, as it tends to pressure the euro, which is negative for dollar-priced commodities, but boosts interest in bullion as a haven from financial risk.
"The currency aspect (of the gold market) is more short term," said VM Group analyst Matthew Turner. "If there is a bailout, the euro will rise and gold will rise in dollars, and if the situation gets worse, we will see gold under pressure."
"But in the medium term, this uncertainty is good for gold, even though it is bad for the euro. As there doesn't seem to be a quick solution to the problem, it is something that will keep gold supported over the rest of the year."
Gold priced in euros rose to a peak of €863.67 an ounce after the news, close to the record high of €864.75 an ounce it reached earlier this month.
Bloomberg