Gold braces for a weekly gain

The precious metal is girding to close this week on gains after dropping last week impacted by demand from China, rise in oil prices and the dollar's plunge.

The shiny metal opened the week at $1369.55 an ounce while reaching a high of $1393.04 and a low of $1365.45.

The previous session, gold shed $14.00 or 1.01% to close at $1373.42, while gold price was setin London at $1381.50 per ounce inclining from $1380.75 during the AM fixing.

A strong boost lifted the metal today to rebound after falling the previous day, after announcements with some traders had showed that China will increase its reserves of gold.

In general, physical buying is still strong in Asia with is helping gold not to drop.

On the other hand, the climb witnessed in oil prices that touched a high of $92.37 a barrel this week gave an impetus to gold as an inflation hedge.

Today, eyes will be on inflation data from the UK, euro zone and US after the release of German CPI which lingered at 1.7% in December.

Yesterday, President of the ECB Jean-Claude Trichet said inflation is expected to rise on the short term.

Also, from the euro zone the successful auctions from Portugal, Spain and Italy managed to restore confidence in markets, helping the euro to rebound from four-month low against the dollar that slipped this week against majors as the ease in European debt woes lowered demand on the green currency as a safe haven.

The dollar index, which tracks the dollar movements versus a basket of major currencies, plummeted for the fifth day on Friday to hit a low of 79.00 while it opened the week at 81.28.

The dollar remains under pressure before the release of important data today and after new yesterday showing that initial jobless claims surged last week to 445,000 above expectations of 410,000.

Spot gold is traded at $1374.30 an ounce after recording a high of $1377.95 and a low of $1371.85.

Among other precious metals, platinum dipped to $1813.50 from the day's opening at $1817.00, palladium slipped to $800.50 from $806.80 and silver plunged to $28.85 from $28.93, as of 08:00 GMT.