Gold rebounds on bargain-hunting

Gold gained for the first time in three days in London as some investors bought the metal after its drop to a six-week low and as a weaker dollar spurred demand for an alternative asset. The dollar was little changed on Monday, touching a three-week low versus the euro on speculation the European Central Bank will raise interest rates this week. European finance ministers on July 2 authorised an €8.7 billion (Dh46.3 billion) loan payout to Greece by mid-July after the nation's parliament passed austerity measures. "The precious metal has benefited from a mix of bargain hunting and stronger euro," said James Moore, an analyst at TheBullionDesk.com in London, in a report. "Trade today [yesterday] is likely to be relatively thin and choppy due to the US holiday." Immediate-delivery gold gained $5.83, or 0.4 per cent, to $1,493.60 an ounce in London. Article continues below The metal dropped to $1,478.83 on July 1, the lowest level since May 17. Gold for August delivery was 0.8 per cent higher at $1,494.20 an ounce on the Comex in New York. Floor trading was closed on Monday for the Independence Day holiday. Bullion rose to $1,495.25 an ounce in the morning "fixing" in London, used by some mining companies to sell output, from $1,483 at the afternoon fixing on Friday. The ECB on July 7 will increase its benchmark rate to 1.5 percent from 1.25 per cent, according to economists surveyed by Bloomberg News. That may boost demand for the euro. Gold typically moves counter to the greenback.