Gold rebounds slightly from the worst decline in 60 days

The yellow metal surged today asthe U.S.dollar slipped, increasing the appeal of the shiny metal as an alternative investment.

Yesterday, gold witnessed its sharpest fall in 2 months as the U.S. dollar strengthened against majors in an upside correctional movement after touching its lowest this year against a basket of major currencies. The dollar's rebound sapped demand on the metal, especially from other currencies holders as it became more expensive.

Moreover, on Thursday, gold shed $14.50 or 1.44% to close at $993.65 an ounce, below $1000 for the first time after 9 days. Gold Prices were setin London at $1009.70 an ounce, declining from $1014.00 an ounce during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, slumped 0.7% to 1,094.107 metric tons on September 24.

Today, gold inclined to $996.65, recording a high of $997.89 and a low of $991.55 as the dollar slides versus six majorcurrencies as indicated by the dollar index which is now at 76.73 compared with the opening at 76.86. On the other hand, oil rose to $66.30 a barrel from the opening at 65.97, the strongest dive in 8 weeks, boosting further demand on gold as an inflation hedge.

Meanwhile, there are fears in markets after the drop in U.S. existing home sales the previous day and after announcements of the FED that despite the growth witnessed it is not optimal to remove stimulus packages since jobless rate is still at 25-year high. The FOMC expects to keep the interest rate unchanged from longer period. Eyes are on the G20 meeting today;where leaders are expected to have the same opinion regarding tightening capital requirements.

Later on today, the U.S. will release important data concerning home sales, confidence, and durable goods with expectations to show decline. Investors are waiting for data today to determine their next direction. Stocks sagged in the U.S. yesterday after the dull housing data. In Asia, the MSCI Asia Pacific Index recorded its largest weekly decline in 30 days. Now, stocks and commodities are moving in the same dierction opposite to the dollar.

Gold prices may gain support at $992 an ounce, while it faces the coming resistance at $1002.