Gold rises on easing dollar as buyers step in

London: Gold prices rose above $1,140 (Dh4,185) per ounce in Europe yesterday, moving further away from the near-four week lows hit recently, as buyers stepped tentatively into the market with support from a weaker dollar.

Many investors had parked on the sidelines ahead of year-end after a sharp correction from record highs last week at $1,226.10 per ounce, analysts said. Most anticipate fresh buying will kick in once the new year gets underway.

Spot gold was bid at $1,141.15 an ounce at 1120 GMT, against $1,130.15 late in New York on Thursday. US gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose $16.40 to $1,142.60.

More gains

"We are in for more gains at the start of next year, but at the moment, speculators will take a step back, and look at the dollar," said VTB Capital analyst Andrey Kryuchenkov.

"We are maybe going to stay in this range of $1,120-1,160 until the end of the year, and then see more sustained gains."

The euro firmed against the dollar, rising to $1.4760 from $1.4734 late in New York on Wednesday.

Traders were eyeing key US data due later in the session, including November retail sales numbers at 1330 GMT and the University of Michigan consumer sentiment index for December at 1455 GMT, for clues as to the future direction of trade.

Any further losses in the dollar could benefit gold. Weakness in the US unit boosts the precious metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Among other commodities, oil prices also edged up 0.8 per cent to above $71 a barrel. Gold tends to track crude prices, as the metal can be bought as a hedge against oil-led inflation.