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Gold rebounds on weaker dollar

10-21-2010 08:42 BJT

CHICAGO, Oct. 20 (Xinhua) -- Gold futures on the COMEX Division of the New York Mercantile Exchange Wednesday rebounded from Tuesday's sharp drop, as U.S. dollar fell again. Analysts hold that a short-dollar long-gold trade would remain intact in the long run. Silver also climbed in the day.

The most active gold contract for December delivery gained 8.2 U.S. dollars, or 0.6 percent, to close at 1,344.2 dollars per ounce.

The U.S. currency fell again following Tuesday's rally, dropping as much as 1.9 percent against the euro, heading for the second straight monthly loss. Market rumor went on Wednesday morning that the Fed was considering an initially 500 billion dollars for the pending quantitative easing program, which triggered dumping of dollar.

Mike Daly, a senior gold analyst with PFGBEST, noted that bargain hunters flocked into gold market after it lost 36 dollars on Tuesday, which also helped buoyed up the market. "They see Tuesday's tumble as a buying opportunity and they do not care about short-term turbulence," said Mike.

Mike predicted that the gold market should go bullish in the long run as long as the world's leading economies continue sluggish recovery. Moreover, the increasing demands for physical gold also help underpin the market.

Silver also followed suit, the most active December silver on Wednesday rose 8.4 cents, or 0.35 percent, to 23.864 dollars.

Editor:Xiong Qu |Source: Xinhua

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