Gold bounces as the dollar retreats
Precious gold surged for the second day, poising for its second weekly advance, as the dollar pared some of its gains this week after the news showing that the German economy grew 2.2%, surpassing analysts' forecasts of 1.3%.
The drop in the dollar increased the appeal of the shiny metal as an alternative investment. The dollar index, which tracks the dollar movements versus a basket of major currencies, slipped to 82.28 compared with yesterday's closing of 82.58.
On the other hand, the euro strengthened against majors after the better-than-estimated German expansion. The largest economy in the euro zone expanded 4.1% on annual basis (non seasonally adjusted) from the revised 2.1%, while the working days adjusted climbed to 3.7% from the year earlier reading of 2.0%.
The surprising expansion boosted the euro and provided more evidence that the euro area economy is on the right track. However, further gains in gold may be expected after the release of GDP for the euro zone which is expected to show 0.7% on the quarter from 0.2% in the first three months of the year.
Markets are witnessing some bullishness at the end of the week as Asian stocks gained for the first time this week spurred by buoyant earnings which offset the rise in U.S. jobless claims the previous day.
Crude oil also rebounded to $76.40 an ounce from the day's opening at $75.65 after falling for three straight sessions, taking advantage of the rebound in shares and the dollar's fall.
Yesterday, gold added $15.60 or 1.30% to close at $1213.60 an ounce. Gold Price was setin London on Thursday at $1213.00 per ounce during the PM fixing inclining from $1200.00 during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion,edged up0.91 metric tons on August 12 to 1,286.70.
Spot gold is trading at $1215.86 an ounce after recording a high of $1217.34 and a low of $1211.37. Gold is preparing for its second weekly advance this weekafter falling for six weeks in a row.
Technically speaking, the breakout of $1200 level yesterday and daily closing above paved the way for the yellow metal to rise further today.
Among other precious metals, platinum soared to $1533.70 from $1525.20 on Thursday; palladium inclined to $472.90 from $469.20; and silver soared to $18.15 from $18.12, as of 07:50 GMT.