Gold bounces back on strong global guidance

Standard gold today bounced back on strong international guidance. It closed at Rs 8,560 per 10 gm gaining Rs 90 at the end of the day's trade. Pure gold followed suit with the same size of gain "� Rs 90, to close at Rs 8,605 per 10 gm.

Bargain hunting and a renewed weakness in the dollar against the euro boosted gold prices in the international market to as high as $576.3 a ounce, an appreciation of 3 per cent from the Wednesday's slump to the lower resistance level of $543.

Traders feel the worst of the recent declines is over, as strong fundamentals would not let the yellow metal fall any further.

Market players, on the other hand, watched movements in the dollar and oil for the absolute direction.

However, some analysts are adopting a cautious stance with regard to the small recovery in a choppy trade, saying this is a just short-time gain.

Gold would move up again with a major support in the form of strong fundamentals, a Macquarie Bank analyst said in his report. He believes that buyers have returned to the market with renewed optimism and great confidence to pull the prices up again.

The technical support level of $540 yesterday was 26 per cent lower from its 26-year peak of $730 that was recorded last month.