Gold rallies on rise in jewellery demand

Gold rallied Tuesday as the jewellery sector came looking for bargains, the dollar slipped and investors fretted about the Greek debt crisis. Spot gold was bid at $1,517.60 a troy ounce at 1122 GMT from $1,514.73 an ounce late in New York on Monday when it suffered its biggest one-day loss in a month, touching a three-week low of $1,511.11. Traders said Monday's sharp fall had encouraged interest from jewellery makers and that investor buying was boosted by the higher euro making commodities priced in the US currency cheaper for holders of other currencies. Talk of a second bailout for Greece coming closer to a conclusion as the European Commission pushes for a voluntary debt swap also shored up sentiment. "A weaker dollar has helped the rebound today, albeit amid low volumes. We see uncertainty surrounding the next aid tranche to Greece as gold supportive," said Andrey Kryuchenkov, analyst at VTB Capital. "Uncertainty will underpin the market towards the end of the month when Athens is scheduled to get its next loan under conditions that are currently being worked out." From / Gulf News