LONDON (Reuters) -
Gold bounced back yesterday towards 28-year highs with speculators and investors betting on strong oil prices and a weakening dollar.The metal, which has gained 25 per cent since the current rally started in mid-August,
remained on track to breach the key technical level of $800 an ounce this year and move towards its all-time high of $850 next year, traders said.Spot gold rose to $792.10/792.70 from $788.90/789.70 in New York late on Thursday, when it fell more than $10 from its peak of $799.30 - the highest since January 1980 - on a fall in oil prices and a recovery in the dollar.''We are still going to see dollar weakness against the euro and I think oil is going to go higher, which has also been a big driving factor behind gold's rally,'' said Tony Dobra, a senior precious metals trader at Standard Chartered Bank.''Some speculators have taken a little bit of profit and that's why we are off the highs, but I think the real speculators will pile in more and drive it higher,” he said.The dollar edged towards record lows against a basket of currencies as investors looked to a key US jobs report later in the day for clues on whether growth is soft enough to warrant another rate cut next month.The Federal Reserve cut rates by 25 basis points to 4.5 per cent as expected on Wednesday, adding to a 50 basis point move in September.A weaker dollar makes gold cheaper for other currency holders and often lifts bullion demand. The metal is also generally seen as a hedge against oil-led inflation.
