Gold Futures Rebound Amid Calmer Markets and Bargain Buying

Gold futures rebounded on Tuesday, driven by a calmer tone in global markets and bargain buying opportunities at lower prices. The most actively traded gold contract for December delivery traded up $15.20, or 0.9%, at $1,693.80 a troy ounce on the Comex division of the New York Mercantile Exchange. Physical demand for gold is starting to return at these levels, analysts with Standard Bank noted, citing the metal's tendency to rebound around the $1,650 support level.

Key Takeaways:

• Gold futures rebounded by $15.20, or 0.9%, to $1,693.80 a troy ounce on the Comex division of the New York Mercantile Exchange.
• Physical demand for gold is starting to return at lower prices, providing a solid support level around $1,650.
• The metal's decline in recent weeks was driven by investors' worries about Europe's potential credit crunch, but calmer markets on Tuesday drew bargain buying opportunities.
• Gold's recent steep declines resemble those seen in late September, when the metal sank in a panic-fueled rout along with commodities and equities.
• The downward revision of U.S. third-quarter growth to 2% had a minimal impact on gold futures, as they held their gains despite the weaker economic data.

Statistics:

• Gold futures rebounded $15.20, or 0.9%, to $1,693.80 a troy ounce.
• The Comex division of the New York Mercantile Exchange saw a significant increase in trading activity on Tuesday, with gold futures trading at a higher price.
• Physical demand for gold returned at the $1,650 support level, providing a solid foundation for the metal's rebound.
• The U.S. Commerce Department's downward revision of third-quarter GDP growth to 2% had a minimal impact on gold futures.

Sources:

• Dow Jones Commodities News via Comtex, Nov 22, 2011
• Standard Bank analysts, cited in the article
• HSBC analyst James Steel, cited in the article
• Matt Day, Dow Jones Newswires, 212-416-4986, matt.day@dowjones.com