Barrick gold project
Barrick Gold Corp. (NYSE:ABX), the world's largest gold producer, is expected to report an increase in 2011 earnings on strong gold prices and controlled costs. Barrick Gold

Gold prices leveled off Friday, consolidating the week's dramatic gains, amid prospects for more increases next week and next month.

The latest catalyst for the yellow metal, as well as global equities and industrial commodities, was this week's surprise announcement from the Federal Reserve that it would keep essentially zero interest rates for the next three years.

The trigger offered by the Fed definitely helped, Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, told Bloomberg. The opportunity costs of holding gold will remain low in the future and this should boost the attractiveness of gold. We don't see an end to the long-term uptrend in gold prices.

Gold has risen 3.6 percent this week and nearly 12 percent since the end of December, breaking through technical barriers that had kept professional traders on the sidelines. On Jan. 11 gold breached its 200-day moving average and on Jan. 25 it topped its 100-day moving average.

Prospects of not only long-term cheap money but also more monetary expansion by the Fed also raises the prospects of an ongoing gold price rally.

More accommodative policy is a very good foundation for gold to build on the next move higher, UBS analyst Edel Tully said in a note. And as the Fed slowly becomes more open about the idea of further stimulus and as European (quantitative easing) remains a possibility, there are significant upside implications for gold.

Industrial metals and materials continued to rise, with crude oil climbing back up above $100 per barrel. The Dollar Index, which gauges the greenback against a basket of rival currencies, fell to 79.34, making gold less expensive for buyers using non-U.S. currencies.

Stocks were mixed. Tokyo's Nikkei 225 was down fractionally while Hong Kong's Hang Seng and Singapore's Straits Times indexes were gaining.

In Europe, equities fluctuated in a tight range. Futures on the Dow Jones Industrial Average, the Nasdaq 100 and the S&P 500 pointed to a higher opening.

Gold for February delivery was off $2.80 to $1,723.90, while spot gold fell $1.88 to $1,724.68.

Silver for March delivery declined 12 cents to $33.63, while spot silver added 17 cents to $33.70.