Gold rose on Wednesday after a slide to two-year lows this week attracted Asian interest in buying the physical metal, but sentiment was still severely shaken by the biggest two-day loss in 30 years, according to Reuters report yesterday. Investors continued to exit gold-backed exchange-traded funds, concerned that the metal has lost its shine as a safe haven and inflation hedge.
Gold rose 0.7 percent to $1,383.15 an ounce by 0755 EDT (1155 GMT), having tumbled to its lowest since January 2011 at $1,321.35 on Tuesday. The market fell by a combined $225 on Friday and Monday, which compares with a total trading range of $260 in 2012.
It is down about 18 percent so far this year after 12 years of gains.
“We bounced a little bit in the past two sessions, and I suspect there was quite good buying coming out of Asia from places like China and potentially India,” Natixis analyst Nic Brown said.
“I think that at this point a new range will be established. We can’t go back to the old $1,500-$1,580 range because investor sentiment has fallen, but it still early days to understand at which levels people will feel they can sell again.”
