Gold stages comeback with aid of weak dollar

(Reuters) – Spot gold rallied 1 percent on Tuesday, snapping four consecutive sessions of losses as a weaker dollar helped battered commodities stage a comeback.

Euro-zone officials are working to magnify the firepower of the region’s rescue fund, European Central Bank policymakers said on Monday, boosting hopes the region will be able to staunch a sovereign debt crisis that threatens the world economy.

The news pushed the dollar down 0.6 percent against a basket ofcurrencies, making gold cheaper for holders of other currencies.

Spot gold gained 1 percent to $1,644.40 an ounce by 0330 GMT, after sinking as much as 7 percent to a 7-1/2-month low near $1,530 in the widest daily swing on record on Monday.

U.S. gold rose 3.3 percent to $1,647.10.

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Posted by VBN on Sep 27 2011. Filed under Gold. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry