Gold rebounded on Wednesday after two consecutive days of sharp losses, but a strong US economic outlook and fears that the Federal Reserve could raise US interest rates limited gains for the safe haven. Traders said that bottom-picking after the metal's biggest two-day drop since October underpinned prices. Bullion was also boosted by technical buying after it found support at its 50-day moving average near $1,290 an ounce for a second straight day.
"We are seeing some bargain hunting after the losses of the past two days," MKS SA head of trading Afshin Nabavi said. Spot gold rose 0.2 percent to $1,296.94 an ounce by 2:16 pm EDT (1816 GMT), after losing 3.3 percent in the last two sessions, its biggest two-day loss since October 1. US gold futures for August delivery settled up $2.70 at $1,299.80 an ounce, with trading volume about 20 percent below its 30-day average, preliminary Reuters data showed. Among other precious metals, platinum was up 0.2 percent at $1,478.50 an ounce, while palladium rose 1 percent to $871.83 an ounce and silver gained 0.1 percent to $20.67 an ounce.