US gold futures raced back up from a prior three-month low early on Thursday, with investors scooping up precious metals at cheaper levels after the market fell for seven straight sessions, dealers said.
A weaker dollar and rising oil price gave gold a further lift, as some traders returned to the yellow metal due to its role as a currency alternative and inflation hedge.
By 10:14 am EDT, August delivery gold was up $7.30 or 1.3 percent at $573.80 an ounce on the New York Mercantile Exchange's COMEX division, dealing from $557.70 to $580.20. On Wednesday, futures slumped to a three-month low of $546.40, following a dramatic plunge in commodities markets on Tuesday.
That earlier retreat came as investors' aversion to risk and a desire for liquidity pressured a range of financial markets. Despite gold's late recovery, dealers saw a lack of steady physical and speculative demand even at cheaper levels and felt that meant it would probably go test support areas again.
Traders viewed support at $550, $540, and $530 to $525, and said they saw resistance at between $575 and $600. Last month, COMEX gold soared to a 26-year high at $732 an ounce before sliding over the next four weeks. Gold futures remained 10 percent higher than at the start of 2006.
Spot gold rallied to $572.90/573.90 an ounce, from Wednesday's New York close at $558.20/558.90. Thursday's afternoon bullion fix in London was at $569.50. COMEX July silver jumped 38.5 cents to $10.12 an ounce, trading from $9.50 to $10.24. On Wednesday, silver dropped to a four-month low of $9.45.
Spot silver reached $10.10/10.20 an ounce, up from $9.59/69 late on Wednesday. Thursday's silver fix hit $10.15. At NYMEX, July platinum rose $21.10 to $1,160 an ounce, well above a previous two-month low of $1,095. Spot platinum last was at $1,160/1,170.September palladium advanced to $301 an ounce, up $8.35, after falling to a four-month low of $267.10 Wednesday. Spot changed hands at $295/300.
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