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Gold rises for first day in seven as traders cover short positions

Gold rose for the first session in seven as traders covered short positions, a day after the yellow metal slid to a seven-week low on expectations of an interest rate hike by the U.S. Federal Reserve, possibly next month.

The buying sentiments were also boosted by an easing dollar and a rally in oil prices, ahead of an extended holiday weekend in the United States, analysts said.

Spot gold rose 0.5 percent to $1,229.61 per ounce at 0325 GMT, climbing for the first time since May 17. The metal fell to $1,217.25 on Wednesday, the lowest since April 6.

"Today there has been a little bit of recovery due to short covering and oil prices trading near $50 is also supporting gold," said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

The prospect of an interest rate hike, as indicated by Fed meeting minutes released last week, and a strengthening U.S. dollar have pushed gold down 5 percent so far in May, putting it on track for its biggest monthly decline since November.

Reference: Reuters