PRECIOUS-Gold keeps up rally after best January in 32 years

Wed Feb 1, 2012 4:21pm GMT
 

* Gold profits from turnaround in euro

* Strongest January in over 30 years means correction likely

* U.S. manufacturing growth at strongest pace since June

By Amanda Cooper

LONDON, Feb 1 (Reuters) - Gold rallied for a second day on Wednesday, supported by upbeat economic data from Germany and the United States, with the precious metal building on gains in January that marked its strongest year-opening month in 32 years.

Spot gold was up 0.4 percent at $1,744.15 an ounce at 1534 GMT, on course for a fifth straight week of gains.

It rose 11 percent in January, the largest one-month gain since August 2011 and the largest for the month of January since 1980, thanks to a combination of the weakness in the dollar from a Federal Reserve commitment to keep U.S. rates near zero and central bank purchases.

Evidence of Germany's economic health helped boost the euro, and gold by extension.

Market sentiment was also boosted by data showing the pace of growth in the U.S. manufacturing sector picked up in January to its highest level since June.   Continued...

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