NEW YORK/LONDON, Sept 11 (Reuters) - Gold surged to a 16-month...

NEW YORK/LONDON, Sept 11 (Reuters) - Gold surged to a 16-month high on Tuesday on bearish sentiment toward the dollar and chart-based buying, extending solid gains from last week.

"The fact that we cleared some highs of the year attracted stronger buying interest. Also, the sentiment toward the dollar is still negative," said David Rinehimer, director of Citi Futures Perspective in New York.


Gold rose as high as $714.20 an ounce, which marked the loftiest level since May of 2006, and was quoted at $712.10/712.90 by 3:00 p.m. EDT (1900 GMT), against $703.30/704.10 in New York late on Monday, when it had risen more than $3.

Most-active December gold on the COMEX division of the New York Mercantile Exchange settled up $8.90, or 1.2 percent, at $721.10 an ounce. It was trading between $711.50 and $723.80, which marked the loftiest level since July 2006.

Rinehimer also cited carry-over support from the news of producer buyback on Monday, when Newcrest Mining Ltd (NCM.AX: Quote, Profile , Research) said it planned to raise about A$2 billion ($1.65 billion) to fund the closing out of gold hedges to take advantage of high prices.

The dollar's trade-weighted index <.DXY> against six major currencies was trading at 79.720, near a 15-year low. The euro was also up against the dollar at $1.3830, nearing its July all-time highs above $1.3850. Continued...

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