Gold Prices Up 2%

Gold prices rose 2% on Friday, extending a three-week rally, on signs that central banks are making less bullion available for lending to speculators, mining companies and jewelers.

“We believe central banks are pulling back on the amount of gold they make available to the market,” said Michael Paolercio, chief executive of Michael Anthony Jewelers Inc. in Mount Vernon, N.Y., the largest U.S. maker of gold jewelry.

Gold for April delivery rose $5.40 to $270.80 an ounce on the Comex division of the New York Mercantile Exchange, the highest closing price since Dec. 29. It was the biggest one-day gain since Oct. 12.

Prices have risen 6.2% from a 17-month low of $255.10 an ounce Feb. 16 in a rally that gained momentum on buying by speculators who had sold contracts expecting prices to fall. A drop below $253.10 would have sent gold to its lowest price in 22 years.