Gold rebounds on weak dollar, caution remains

LONDON, Dec 15 (Reuters): Spot gold rose on Thursday, rebounding from sharp falls in the previous session on short covering and a weak dollar, but prices hovered near 2-12 month lows as intensifying worries about the euro zone debt crisis prompted investors to remain cautious. The precious metal has lost 9 per cent of its value this month, on track for its first monthly fall since September and weakest December since 2008 when the global credit crunch was at its worst. Although gold is regarded as a safe haven asset to shield investors in times of uncertainty, it has increasingly become prone to pressure from the wider financial market, moving in tandem with other assets as investor sentiment remains fragile.