Gold rose on Wednesday, recovering after hitting its lowest in more than three months in the previous session, as the US dollar eased from a two-month high and stocks fell. Spot gold was up 0.4 percent at $1,272.21 an ounce by 0645 GMT, after dropping more than 3 percent on Tuesday to its lowest since June 24. US gold futures rose 0.4 percent to $1,274.60 an ounce, after also falling more than 3 percent on Tuesday.
"Tuesday's fall was really a long liquidation and was probably overdone. If the non-farm payroll data this week is too good, then we might try another low," said Yuichi Ikemizu, head of commodity trading at Standard Bank in Tokyo. "Still, $1,250 would be a good support. I don't really expect gold to go much lower from here and we could see steady buyback toward $1,300 levels," Ikemizu said.
The drop on Tuesday was bullion's biggest one-day percentage fall since September 2013 and brought spot gold to its lowest level since Britain voted to leave the European Union in June. "The market is clearly very long and someone started testing the $1,300 levels, and there were more stops than buys," a Hong Kong-based trader said.
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