Gold Rises as Risk Appetite Returns

NEW YORK (TheStreet) -- Gold futures climbed back from their three-week lows, as risk appetite increased and the U.S. dollar fell.

Gold for December delivery was adding $16.60 to $1,046.10 an ounce at the Comex division of the New York Mercantile Exchange. The contract rallied earlier and has traded as low as $1,026.90 and as high as $1,048.40 an ounce.

Silver rallied 42 cents to end at $16.66 and copper prices closed up 10 cents to $3.03.

Gold Rebounds

The U.S. dollar came under pressure after the government said GDP rose 3.5% in the third quarter, which was better than expected. The U.S. dollar index sunk for the first time in four days to $76.15 as the news sparked investor risk appetite. Gold's critical support level remains $1,025 and as long as it holds, the precious metal could trade higher.

"In the near term, we could continue to see risk appetite pick up, see the dollar come back under pressure and see gold prices push higher," says Nicholas Brooks, head of research and investment strategy for ETF Securities. "Medium to long term, when things really go wrong, when one gets concerned with what's happening structurally to the U.S. dollar, to debt or we a have financial crisis, ... gold tends to do very well." In the short term, gold will stay volatile in relation to the U.S. dollar.

In mining stocks, Barrick Gold(ABX Quote) was popping 6% to $36.79 after the company reported a better than expected quarter of 54 cents a share. Barrick posted a $5.4 billion loss, mainly due to an accounting change from the company's plan to eliminate its gold hedges and give investors exposure to gold's spot price. Barrick's gold hedges have been reduced to 1.9 million ounces and floating contracts have shrunk to 1.5 billion. There is still a remaining liability of $1.3 billion, but Barrick CEO Aaron Regent said that "we have dealt decisively with our gold hedges which will be completely eliminate within 12 months." Barrick also announced a dividend of 20 cents a share.