(Reuters) - Gold prices rose 1 percent on Friday to 6-1/2 month highs as expectations that central bank measures to stimulate growth would boost liquidity, fuel inflation and keep a lid on interest rates put the metal on track for a fifth straight week of gains.
A firmer tone across the financial markets also supported bullion. European shares and the euro rose, while oil rebounded from a 1-1/2 month low, as investors moved back into markets still feeling the benefits of central bank support measures. <MKTS/GLOB>
Spot gold hit a peak of $1,787.20 an ounce and was up 0.8 percent at $1,771.14 an ounce at 9:44 a.m. EDT (1344 GMT), while U.S. gold futures for December delivery were up $14.00 an ounce at $1,784.20.
The Bank of Japan was the latest central bank to unveil easing measures this week, after the Federal Reserve announced an aggressive asset purchasing program earlier this month and the European Central Bank unveiled plans to buy bonds of the bloc's heavily indebted countries.
The Fed move, a third round of so-called quantitative easing which will see it buy $40 billion a month in mortgage-backed debt until the outlook for the labor market improves, lifted spot gold by 2 percent in a single day.
"QE3 was a bit of a game-changer for a lot of people. People are having to think seriously about where they put their money," Ross Norman, chief executive of bullion broker Sharps Pixley, said. "Gold does seem to have taken on a life of its own now. We think we might see $1,800 in the next couple of weeks or so."
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