Gold rebounds towards 18-month high

Precious-Gold rebounded on Thursday, after yesterday's drop, as the U.S. dollar retreated, spurring demand on the shiny metal as an alternative investment.

On Wednesday, gold shed $6.40 or 0.63% to close at $1008.27 an ounce. Gold Prices were setin London on Wednesday at $1010.25 an ounce, declining from $1014.75 an ounce during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, remained at 1,101.735 metric tons on September 23.

The previous day, gold faced some sell off by investors after approaching an 18-month high as the U.S. dollar strengthened, snapping some of its earlier losses. The FOMC, as expected, kept the interest rate unchanged and upgraded its assessment for the economy, but the FED is closer to withdrawing the stimulus. Stopping methods of quantitative easing in the upcoming period, after the improvement seen, may reduce the appeal of the shiny metal as an inflation hedge.

Stocks sagged in the U.S. dragged down by commodities, which fell as the dollar inclined versus majors, while Nikkei Index in Japan closed today at its highest level in a month, adding 1.7% to close at 10544.22.

What is keeping gold prices above the $1000 levels is the weak dollar, which slipped once again today. The dollar index, a gauge of the dollar's strength versus a basket of major currencies, is now at 76.16 compared with the opening at 76.35. The green currency is now close to its lowest level this year, which may encourage buyers by other currencies to purchase gold as it becomes cheaper.

Moreover, eyes today are on the G20 in their first day of the meeting, where they are anticipated to continue their policies by reviving growth and lowering trade imbalances. Also, today investors are awaiting important U.S. data, as existing home sales and jobless claims are going to be released later in the day.

Spot gold is now being traded at $1013.40 an ounce, recording a high of $1014.25 and a low of $1006.45. Among other precious metals, platinum is traded at $1330.50; palladium is now at $295; and spot silver is at 16.84.