Gold rises on economic optimism

NEW YORK/LONDON (Reuters) - Gold rose toward $1,050 an ounce on Thursday, gaining 2 percent after data showing optimistic U.S. economic growth knocked the dollar and sent Wall Street into a rally mode.

Other precious metals rose sharply in gold's wake, with silver climbing more than 3 percent, platinum nearly 2 percent and palladium nearly 3 percent.

Gold has recently climbed in tandem with rising equities, driven by economic optimism. Historically, the metal moves in opposite direction to stocks because of bullion's appeal as a safe haven in terms of crises.

Frank Holmes, chief executive of U.S. Global Investors, said that gold was able to perform well in a low interest rate environment amid currency depreciation and inflation worries.

Spot gold hit a high of $1,047.50 an ounce and was at $1,045.75 an ounce at 2:21 p.m. EDT (1821 GMT), against $1,026.85 late in New York on Wednesday.

U.S. December gold futures settled up $16.60, or 1.6 percent, at $1,047.10 an ounce on the COMEX division of NYMEX.

The U.S. economy grew at a greater-than-expected 3.5 percent in the third quarter, data showed on Thursday, unofficially ending the worst recession in 70 years.

"The U.S. GDP was better than expected, and that has encouraged some more risk appetite to come into the complex, as the U.S. dollar weakens," said Standard Chartered analyst Daniel Smith.

The news knocked the dollar lower against the euro and a basket of currencies .DXY. The euro has been viewed as a proxy for risk appetite for much of the year, gaining when economic data is positive. <FRX/>

Weakness in the dollar benefits gold, which is often seen as an alternative asset to the U.S. unit.

"The general trend is still for further dollar weakness, which will be supportive for the whole commodities complex," said Smith.

Gold investors took heart as the U.S. stock market added gains in afternoon trade, reversing heavy losses from the previous two sessions. The broad-based S&P 500 index .SPX rose more than 2 percent.

Oil prices rose back toward $80 a barrel after the GDP figures, making up lost ground after the previous session's 2.6 percent decline. <O/R>

Strength in crude prices often helps gold because bullion is sometimes viewed as a hedge against oil-led inflation.

OUTFLOW IN SPDR GOLD

Some physical gold demand is also returning to the market after prices slid, dealers said, helping the metal shrug off a further small outflow from the world's largest gold-backed exchange-traded fund.

On the investment side, New York's SPDR Gold Trust reported an outflow of a further 1.22 tons on Wednesday, the third such sale this week. <GOL/SPDR>

In official-sector news, Russia now plans to sell 25 tons of gold from the state precious metals and gems repository Gokhran, possibly on the local market. For details, click within the brackets.

Among other precious metals, spot silver was at $16.59 an ounce against $16.09, tracking gold higher after the previous session's 3.3 percent decline.

Platinum was at $1,336.50 an ounce against $1,303.50, while palladium was at $324.50 against $313.50.

(Editing by Christian Wiessner)