Gold bounces on physical buying, off 7-month low
Gold recouped early losses on Monday on firmer equities and after last week's drop to a 7-month low spurred physical buying in Asia, but investors were cautious over the outcome of an unpredictable election in Italy and its impact on the euro zone.
Investors shrugged off slower growth in China's manufacturing sector in February, which is unlikely to change expectations the world's second-largest economy is enjoying a gentle recovery.
Gold rose $3.31 an ounce to $1,583.61 by 0326 GMT after posting modest gains on Friday. It hit a seven-month low of $1,554.49 on Thursday after minutes from the U.S. Federal Reserve's latest policy meeting triggered worries the central bank might stop or slow its bond buying programme.
"After the drop, hopefully the worst is over for gold, although the support is still at $1,527. I believe (after) a break above $1,585, you might see a trend that it should test $1,600," said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore.
U.S. gold for April was at $1,583.20 an ounce, up $10.40.
The euro bounced from a six-week low around $1.3145, but further upside may be limited as investors eye the vote in Italy, where exit polls will be published shortly after 1400 GMT on Monday.
An unstable government in Italy could cause another crisis of confidence in the European Union's single currency. Gold struck a record of around $1,920 in September 2011, when a worsening debt crisis in Europe ignited a buying rush.
Be the first to comment.
