Spot gold rose more than 1 percent on Thursday, as its biggest daily decline in more than three years attracted buyers who bet on a further rally in bullion despite the slightly hawkish tone of US Federal Reserve Chairman Ben Bernanke. Spot gold rose 1.5 percent to $1,720.33 an ounce by 0606 GMT, rebounding after a 5 percent fall on Wednesday, its largest one-day loss since December 2008.
Gold prices rose rapidly after the Shanghai Gold Exchange started trading in the morning, as investors took advantage of a $10 discount in spot prices in the global market versus Shanghai prices. The discount has since narrowed, with Shanghai gold trading at 349.30 yuan a gram, or $1,724.32 an ounce. US gold gained 0.6 percent to $1,721.60.