Gold rebounds as the dollar retreats

The precious metal pared its earlier drop on speculation's Chain's tightening monetary policy would lower demand on commodities.

China decided to raise interest rate by 25 basis points in December for the second time since October to rein in inflation which raised concerns that China's tighten policy would affect global recovery.

Gold rebounded from a low of $1371.05 an ounce to touch a high of $1386.30, where it is currently trading at $1384.51.

Oil also continued its rise for the sixth consecutive session to touch a high of $91.85 a barrel from the day's opening at $91.00, taking advantage of the dollar's drop.

The green currency fell against a basket of major currencies, as depicted by the dollar index, after touching a high of 80.67 to reach a low of 80.20.

The previous session, gold added $4.90 or 0.36% to close at $1381.20, while gold price was setin London at $1380.50 per ounce during the AM fixing.

Among other precious metals, platinum edged down to $1726.20 from the day's opening at $1732.20, palladium inched down to $761.50 from $761.70 and silver hovered around $29.23, as of 07:55 GMT.

Perhaps the most important data released this week is US consumer confidence and jobless claims in addition to housing data amid the year-end festivals.