Gold up on weaker dollar headed for third weekly gain

LONDON (July 27)  Reuters reported that gold edged higher staying on track for its third straight weekly gain helped by a weaker dollar and hopes of a prolonged period of easy monetary policy.

Bullion has gained nearly 10% in three weeks its biggest such winning streak in 2 years after the Federal Reserve assured financial markets it would only start phasing out its stimulus when it was sure the economy was strong enough to stand on its own.

Spot gold had climbed 0.5% to USD 1,339.61 an ounce by 0249 GMT, nearly USD 160 more than the three year low hit on June 28.

Mr Danny Laidler head of ETF Securities' Australia and New Zealand business said that "The mood towards gold has definitely changed in recent weeks as the market thinks most of the bad news is priced into gold already. I wouldn't say people are bullish gold but they are definitely less bearish. Outflows from the firm's gold backed exchange traded fund (ETF) have slowed.

Gold has lost a fifth of its value this year as investors feared a strong recovery in the United States might prompt the Fed to start scaling back its USD 85 billion monthly bond purchases. Outflows from gold ETFs have also weighed on prices