Gold bounces on bargain hunting
Tuesday, 06 May 2008

REUTERS, SINGAPORE - Gold rebounded on Monday as bargain hunters snapped up bullion after a fall to a four-month low last week, but trading was thin in the absence of Japanese speculators.

Gold rose to $861.10/864.10 an ounce from $855.80/857.00 an ounce late in New York on Friday, when it tumbled to $845 an ounce, its lowest since Jan 2, after the dollar jumped on better-than-expected US jobs data.

It has lost more than 16 percent in value since spiking to a record high of $1,030.80 an ounce on March 17. Tokyo precious metal futures markets are closed on Monday and Tuesday for public holidays.

"I think given that we have a relatively strong rally in oil, we're certainly finding some good support," said Darren Heathcote of Investec Australia in Sydney.

"I think the current resistance will be around $868. I guess that recent lows around $845 are probably going to support," said Heathcote, adding that gold was consolidating after the recent drop.

Oil barely moved around $116 a barrel on Monday, pausing after jumping more than 3 percent last week on further supply disruptions in Nigeria and tensions between Iran and the West.

The euro inched up to 1.5432 but was well off April's record highs around $1.6018. The dollar firmed on Friday after US payrolls fell by a surprisingly small 20,000 in April, while the jobless rate actually dipped to 5.0 percent.

Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange rose $6.3 an ounce to $864.4 an ounce. Spot platinum rose to $1,895/1,905 an ounce from $1,861/1,881 late in New York.

Silver edged up to $16.54/16.59 an ounce from $16.32/15.38 an ounce. Spot palladium rose to $413/421 an ounce from $410/418 late in New York.

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