Gold rose nearly 2 percent on Thursday, bouncing off a three-week low touched in the previous session as the dollar fell sharply from recent highs, making the metal cheaper for holders of other currencies. Spot gold gained 1.7 percent at $1,234.18 per ounce by 14:02 p.m EDT (1802 GMT) after rising as much as 1.9 percent to its highest since Oct. 26 at $1,237.39. US gold futures settled up $23.60, or 1.94 percent, at $1,238.60.
"The pretty aggressive drop in the US dollar was a significant catalyst for gold today," said Bart Melek, head of commodity strategies at TD Securities. "The drop in the US bond yields, dollar and improvement in Chinese yuan were major factors and we continue to have volatility in the equity markets. With all of that we have seen significant short covering in gold."
Gold fell in the three previous sessions and touched its lowest since Oct. 11 on Wednesday at $1,211.52 per ounce. Among other precious metals, platinum climbed 2.8 percent to $859.40 per ounce, having touched its highest since June 27 at $860.90 earlier in the session. Silver jumped 3.7 percent to $14.74 per ounce, while palladium rose 1.2 percent to $1,091.45.
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