Gold retains gains, firm above $1,200 on China rate cut

---

Gold traded firmly above $1,200 an ounce on Monday, retaining gains from the previous session on hopes that a surprise rate cut in China would boost demand for bullion in the top consumer.

Spot gold was steady at $1,202.20 an ounce by 0028 GMT, after gaining 0.6 percent on Friday.

Gold got a boost from short-covering after China cut interest rates unexpectedly on Friday, stepping up efforts to support the world's second-biggest economy as it heads towards its slowest expansion in nearly a quarter of a century, saddled under a mountain of debt.

China's leadership and central bank are ready to cut interest rates again and also loosen lending restrictions, concerned that falling prices could trigger a surge in debt defaults, business failures and job losses, said sources involved in policy-making.

Bullion also got support from comments from European Central Bank President Mario Draghi that opened the door for more drastic measures to prevent the euro zone from sliding into deflation.

Gold is seen as a hedge against inflation and slowing economy.

Reuters : Reuters

Asian Stocks Rise Second Day as China Rate Cut Boosts Optimism

---

Asian stocks rose for a second day after U.S. indexes reached another record as Chinas unexpected interest-rate cut stoked optimism in the global economy.

The MSCI Asia Pacific excluding Japan Index climbed 0.5 percent to 475.75 as of 9:02 a.m. in Seoul. China reduced interest rates last week, joining the European Central Bank and the Bank of Japan in deploying fresh stimulus. That contrasts with the Federal Reserve, which has ended its bond-buying program as the U.S. economy strengthens. ECB President Mario Draghi said Nov. 21 he will do what is necessary to spur inflation.

South Koreas Kospi index surged 1 percent. Australias S&P/ASX 200 Index jumped 1.4 percent. New Zealands NZX 50 Index was little changed. Japanese markets are closed for a holiday. Futures on Hong Kongs Hang Seng Index soared 2.1 percent in their most recent trading session, with the cash market yet to open today. Contracts on the Hang Seng China Enterprises Index surged 3.2 percent.

China cut benchmark interest rates for the first time since July 2012 as leaders step up support for the worlds second-largest economy. The one-year lending rate was reduced by 0.4 percentage point to 5.6 percent, while the one-year deposit rate was lowered by 0.25 percentage point to 2.75 percent, the Peoples Bank of China said on its website on Nov. 21.

Source: Bloomberg