(Recasts, updates with quotes, closing prices, market
activity, adds NEW YORK to dateline)
By Frank Tang and Atul Prakash
NEW YORK/LONDON, March 25 (Reuters) - Gold finished nearly
2 percent higher on Tuesday, rebounding from its recent sharp
decline as funds poured into the market after the dollar
slumped broadly on weak U.S. economic data.
Investors were cautious after their confidence was shaken
by a recent sell-off in commodities, with gold falling more
than 10 percent last week since spiking to a record high of
$1,030.80 an ounce on March 17.
Platinum has fallen more than 20 percent from this month's
record high of $2,290 before recovering, silver has slipped 20
percent from a 27-year high, and palladium has plummeted nearly
30 percent before moving higher.
Gold <XAU=> touched a low of $911.50 an ounce on Tuesday
before hitting a high of $936.50. It was at $934.60/935.40 by
New York's last quote at 2:15 p.m. EDT (1815 GMT), against
$920.90/921.70 in New York late on Monday.
"We see some consolidation in the market between $910 and
$950, but the potential clearly remains on the upside," said
Frederic Panizzutti, analyst at MKS Finance.
"Any continuation in the dollar's downside trend would
enable gold to move towards the upper side of the range and
possibly break it, but after the massive price correction the
market would be cautious."
The dollar retreated broadly, posting its steepest loss
against the euro in two weeks and hurt by concerns about the
health of the U.S. economy and the global financial sector.
A private sector report showed U.S. consumer confidence in
March fell to a five-year low, while expectations for the
future dropped to their lowest level in 34 years. U.S. home
prices for January fell in 16 of the 20 regions measured.
A weaker dollar makes gold cheaper for holders of other
currencies and often lifts bullion demand. The metal is also
generally seen as a hedge against oil-led inflation.
"Gold is up today on bargain-hunting after the heavy losses
of last week. A softer dollar is also encouraging buyers to
return to the market," said David Thurtell, analyst at BNP
Paribas.
"Weaker longs have been cleaned out, so we expect some
consolidation at these levels. The next major signposts for
gold will be U.S. ISM and nonfarm payrolls figures next week,"
he said, referring to the Institute for Supply Management
data.
OIL PRESSURE
Gold was under pressure from oil, which initially fell as
fresh concerns about weaker demand in top oil consumer the
United States tempted some players to cash in. U.S. crude
futures <CLc1> settled 36 cents higher to $101.22 a barrel.
"The market seems to be cautious after a massive crash and
this fear to re-enter the market is likely to disappear as gold
continues to stay above key supports," said Pradeep Unni,
analyst at Vision Commodities in Dubai.
"We reiterate that fundamentals of gold that have been
supporting its rally for the last eight years and more haven't
changed in the last week's fall. Seldom do we get an
opportunity to buy a commodity 10-12 percent cheaper in a bull
market."
In U.S. markets, the active gold contract <GCJ8> for April
delivery on the COMEX division of the New York Mercantile
Exchange settled up $16.30, or 1.8 percent, to $935 an ounce,
but off a record high of $1,033.90 an ounce hit last week.
Platinum <XPT=> jumped 4 percent to $1,960/1,970 an ounce,
against $1,880/1,890 late in New York on Monday.
"With the stock market going up yesterday, people are
looking at recession risk weakening a little bit. So they are
going to start investing a little more," said Adam Rabinowitz,
floor trader with RJ Futures in New York.
Rabinowitz said Tuesday's rally was mostly boosted by
speculators and day traders, and he cautioned that the recent
wave of selling in platinum might not be over yet.
Palladium <XPD=> rose to $442/447 an ounce from its
previous finish of $427/432, while silver <XAG=> was up at
$17.80/17.85 an ounce from $16.95/17.00 in the U.S. market late
on Monday.
(Editing by Jim Marshall)
