SINGAPORE: Spot gold rebounded on Monday as Asian buyers rushed to snatch bargains after a nearly 2-percent drop in the previous session, while uncertainty ahead of a deadline for Greece to accept the terms of a new bailout deal also supported prices.
Surprisingly strong U.S. jobs data on Friday boosted equities and industrial metals, but bullion recorded its biggest daily fall in more than a month as the data dampened hopes of fresh quantitative easing measures.
Analysts and traders, however, remain positive on the outlook for gold as a murky global economic outlook amid a festering euro zone debt crisis is expected to prompt central banks to keep their monetary policies accommodative.
"The QE3 (third round of quantitative easing) is less likely after the jobs data, but the longer-term low interest rate outlook is still potentially supportive of gold," said Nick Trevethan, senior commodity strategist of ANZ in Singapore.
Spot gold gained 0.5 percent to $1,733.75 an ounce by 0614 GMT. U.S. gold edged down 0.2 percent to
Technical analysis suggested spot gold could rise to $1,742 an ounce, Reuters market analyst Wang Tao said.
Bargain hunting from Asian buyers, especially from China, also helped the rebound in gold, traders said.
"There has been quite a lot of buying since Shanghai opened, as gold was 30 bucks cheaper than they last saw it," said a U.S.-based trader.
"We will be supported around $1,730 in the next few hours, although when Europe comes in it would be an entirely different picture."
Greece is facing a deadline later today on whether to accept the painful terms of a new bailout to avoid a chaotic default.
Money managers, including hedge funds and other large speculators, increased their net length in U.S. gold futures and options last week to its highest since late November, data from the U.S. Commodity Futures Trading Commission showed.
Strong demand from China as well as India will likely continue buoying sentiment in bullion, said Trevethan of ANZ.
China, the world's largest gold producer, churned out a record of 360.95 tonnes of gold in 2011, which pushes the annual consumption to at least 800 tonnes based on calculations factoring the gold flow from Hong Kong to the mainland in the first 11 months of the year.