Gold Rebounds as Investors Gain Confidence in Economy

Oct. 17 (xinhua) -- Gold futures on the COMEX Division of the New York Mercantile bounced off on Friday October 14th, as investors gained more confidences from the September's expansion in U.S. retail sales. Besides, a weaker U.S. dollar added to the positive tone.

The most active gold contract for Dec. delivery hiked 14.5 U.S. dollars, or 0.87 percent, to 1,683 dollars per ounce.

Market analysts said that investors are gaining confidence over U.S. economy after the Commerce Department reported that the retail sales rose a seasonally adjusted 1.1 percent in September, the largest increase in seven months.

Analysts added that in recent trading days, gold has tended to follow U.S. equities, losing some traction as a safe-haven asset, as a stronger stock market could help recover their capital crunch and thus, ease impulsion to cash in gold holdings. The Dow Jones Industrial Average on Friday rose 166.36 points, or 1.5 percent, to 11,644.49 points. It gained 4.9 percent for the week.

Meanwhile, the weakened dollar also helped to buoy up gold price. The dollar index Friday lost 0.576 percent from the prior trading day to 76.6.

Gold has gained 2.9 percent so far this week. A trader noted that the gold market is recovering from previous sharp drop.

The trader said that gold is likely to remain supported as the sovereign-debt crisis in Europe, despite recent signs of optimism, remains far from over. "There's macro-economic, systemic and monetary risk in the world and there's no sign of that going away any time soon. All the factors that drove gold to a record are still there," said the trader.

Silver for Dec. delivery gained 50.6 U.S. cents, or 1.6 percent, to 32.173 dollars per ounce. Platinum for January delivery also added 22.5 dollars, or 1.47 percent, to 1,554.9 dollars per ounce.