GLOBAL MARKETS-Gold, U.S. stocks bounce after rout but oil falters

Tue Apr 16, 2013 10:31am EDT

* Gold bounces after hitting weakest in over 2 years

* Wall Street opens higher, though European stocks weaker

* Brent crude falls back below $100 a barrel

By Leah Schnurr

NEW YORK, April 16 (Reuters) - Gold and U.S. stocks rebounded on Tuesday as the previous session's sell-off lured buyers into the market, but demand concerns sent oil below $100 a barrel for the first time in nine months.

The broad rout in commodities and stocks seen in recent sessions was triggered by weak data from China and the United States that have sparked fresh concerns about the strength of the global economy's recovery.

Gold has fallen about 20 percent so far this year after an unbroken 12 years of gains and is down some 28 percent from the record high hit in September 2011 of $1,920.30.

Spot gold lost more than 8 percent on Monday alone and had dropped further to $1,321.35 an ounce earlier on Tuesday. It later reversed direction and was recently up 1.6 percent at $1,374.04.

"I think everyone has to take a breath now ... But there are people who still want to sell and they haven't done so yet," said David Govett, head of precious metals at Marex Spectron.

Analysts have cited various reasons for gold's latest slump, including funds switching out of bullion and the possibility that other central banks in Europe could use Cyprus's bailout plans to sell excess gold reserves as a reason to sell some of their own holdings.

The bounce in gold helped stocks on Wall Street open nearly 1 percent higher, while data that showed U.S. consumer prices fell in March left room for the Federal Reserve to keep up its economic stimulus efforts.

"The big thing dragging down stocks yesterday was really the sharp decline in gold and you see that lifting here a bit," said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, New York.

The Dow Jones industrial average gained 105.67 points, or 0.72 percent, to 14,704.87. The Standard & Poor's 500 Index gained 12.49 points, or 0.80 percent, to 1,564.85. The Nasdaq Composite Index gained 20.02 points, or 0.62 percent, to 3,236.51.

Investors were also taking in a batch of earnings reports from U.S. companies including Goldman Sachs, which reported profit that beat expectations.

MSCI's global share index, which tracks around 9,000 stocks in 45 countries, was up 0.4 percent, having been almost 0.5 percent lower earlier in the day. The FTSEurofirst 300 was off 0.3 percent.

But oil continued to languish with Brent crude falling below $100 a barrel for the first time in nine months as concerns persisted over the outlook for demand. Brent crude was down $1.43 at $99.20, while U.S. crude 84 lost cents to $87.87.

"Somewhat disappointing Chinese GDP data yesterday might have contributed to the bearish sentiment in the oil futures markets," analysts at JBC Energy said.

"However ... Monday's sell-off across virtually all commodities and equities markets and the extent of losses in some markets is difficult to justify on fundamental grounds solely, with herd behaviour and momentum trading contributing," JBC Energy said.