Gold rebounds on Chinese interest rates cut

A saleswoman sorts gold products at a shop in Lin'an, Zhejiang province. [Hu Jianhuan / China Daily]

CHICAGO - Gold futures rebounded on the COMEX division of the New York Mercantile Exchange Friday as the People's Bank of China, the country's central bank, announced to cut interest rates in the same day.

The most active gold contract for December delivery rose $6.8, or 0.57 percent, to settle at $1,197.7 per ounce.

The PBOC announced to cut the benchmark rate for one-year deposits by 25 basis points and the one-year lending rate by 40 basis points from Saturday.

Analysts said that the rate reductions were the first of the kind since July 2012,which boosted demand for gold as a store of value.

Also, European Central Bank President Mario Draghi reiterated Friday his determination to apply more aggressive measures including large scale asset purchases to boost the waning economy in the eurozone. Analysts said the dovish tone of Draghi also put gold higher.

Silver for December delivery gained 25.8 cents, or 1.60 percent, to close at $16.395 per ounce. Platinum for January delivery gained $21.7, or 1.80 percent, to close at $1,227.3 per ounce.