Gold recovered on Thursday from a three-week low hit in the previous session as the recent drop in metal prices and an easing of the US dollar from multi-month highs stoked buying. Spot gold was up 0.8 percent at $1,222.41 per ounce, at 0744 GMT, after falling for three sessions in a row. Gold touched its lowest since Oct. 11 at $1,211.52 per ounce on Wednesday.
US gold futures were up 0.9 percent at $1,225.4 an ounce. Investors are wary of a potential saturation in currencies ahead of the US mid-term elections and amid other geo-political uncertainties, said Brian Lan, managing director at Singapore dealer GoldSilver Central.
"People would like to hold something of value, and gold looks good at this point of time," Lan said, adding that the dip in dollar was also supporting the metal. "Yesterday, a stronger dollar kept gold under pressure. The market was overdone and gold prices fell to about $1,211 ... There is some buying interest in the Asian markets at the lower levels," said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong.
"The bearish correction in global financial markets has waned off though traders remain guarded on riskier assets for the current term," said Benjamin Lu, a commodities analyst with Phillip Futures. Spot gold may bounce moderately to $1,224 per ounce before retesting a support at $1,211, said Reuters technical analyst Wang Tao.