Gold advances after biggest retreat this year as dollar weakens

LONDON: Gold today rebounded from the biggest drop of 2014 as investors speculated recent losses have been excessive and the dollar slipped from a five-year high.

Gold rose 0.4 per cent to $ 1,144.90 an ounce. The metal lost 2.4 per cent yesterday, the most since December. silver, however, slipped 0.2 per cent to 15.30 an ounce. Silver fell for a seventh day, the longest streak since April 2013.

The dollar Spot Index fell 0.1 per cent today, though still headed for a weekly gain on speculation the Federal Reserve is moving toward raising interest rates. Gold's 14-day relative strength index was below 30 for a fifth day, signaling to some investors that prices will rebound.

Holdings in the SPDR Gold Trust shrank yesterday to the smallest since September 2008 as US stocks rallied to records, curbing demand for haven assets such as gold. Almost $ 1.9 billion was erased yesterday from the value of precious metals-backed funds