Gold still on track for second monthly gain

Gold retreated on Friday, shrugging off gains in the euro and struggling to maintain traction after this week\'s already hefty price climb, as buyers favoured assets seen as higher risk such as stocks and industrial commodities. Prices are still heading for a second monthly gain, however. Silver outperfomed other precious metals to hit a fresh five-month high, after breaking a key technical level on Thursday. Spot gold was at $1,775.94 an ounce at 1300 GMT against $1,779,79 late on Thursday. The euro hit a two-and-a-half month high against the dollar, building on gains it made a day earlier after improved German business sentiment data and on lingering relief over an agreement for a second bailout of Greece. A consequently weaker dollar would usually weigh on gold. However, gold\'s relationship with the currency markets sometimes breaks down when risk appetite is unusually weak or strong, as the metal itself is often seen as a haven from risk. \"It depends what the driving factors are for euro strength and dollar weakness,\" said Commerzbank analyst Eugen Weinberg. \"In this case, demand for safe havens is likely to be less pronounced, especially as gold prices are still relatively high compared to where they were at the beginning of the year. \"It\'s not unlikely that we\'ll see further profit-taking.\" Sharper appetite for higher-risk assets drove stocks higher in Europe, while safe-haven German government bonds dipped.