Gold Prices Rise on Optimism about Global Growth

Gold prices rose Monday to a six-week high on widespread optimism that recent signs of global economic growth mark a sustainable pattern.

The Commodity Futures Trade Commission showed that money managers boosted their bets on gold last week nearly six percent in the first such increase since early December.

Chinese monetary authorities are expected to take initiatives to stimulate their economy, which is growing but at a slower and slower rate.

Meanwhile, U.S. economic data continues to be positive if not overwhelmingly robust. The number of applications for unemployment benefits has been falling and last week the Federl Reserve said U.S. manufacturing grew in December.

Further, the price of gold has been steadily rising this month for a year-to-date gain of more than six percent.

It's a play on a possible demand recovery, Spencer Patton, the Chicago-based chief investment officer for Steel Vine Investments LLC, told Bloomberg. People are now accepting gradually that the Europe situation is not that terrible, and China will probably have a soft landing. And the icing on the cake is the growth in the U.S.

Gold's gains were aided by weakness in the dollar, which was off 0.32 percent to 80.15. The euro was off against the dollar but only fractionally so.

Stocks in Asia and Europe were mixed. In the U.S., futures on the Dow Jones Industrial Average, the Nasdaq 100 and the S&P 500 all pointed to a lower opening.

Gold for February delivery increased $12.30 to $1,676.30, while spot gold rose $9.02 to $1,675.80.

Silver for added $1.02 to $32.70, while spot silver was up 64 cents to $32.72.