NEW YORK/LONDON (Reuters) - Gold rebounded in heavy trade on Friday, reversing early sharp losses as the metal took heart from gains in crude oil and U.S. equities’ after an encouraging U.S. nonfarm payrolls report.
Bullion, which has taken to following riskier assets, rose in the face of a dollar rally and diminishing hopes of further monetary stimulus from the Federal Reserve after employment grew strongly for a third straight month.
Analysts said gold prices have already factored in a recovering economy which lessened the need of more monetary easing. Gold notched a 5-percent drop last Wednesday after Fed Chairman Ben Bernanke did not signal more easing was on the way.
Also lifting the metal was Greece’s winning acceptance of its bond swap offer to private creditors. It also found technical support from its key 200-day moving average.
“Despite the severity of the early steep losses, we have already seen fairly decent buying coming in, and the firm oil prices were helping,” said James Steel, chief commodity analyst at HSBC.
“Gold is showing a lot of resiliency and it may rebound as emerging-market demand is gradually reviving,” Steel said.
Spot gold gained 0.5 percent on the day to $1,708.29 an ounce by 11:34 a.m. EST (1634 GMT), having fallen to a session low of 41,677.34.
Gold is set for a flat finish for the week, as its gains on Friday have largely erased losses from earlier this week.
U.S. gold futures for April delivery were up $10.40 at $1,709.10 an ounce
Spot silver rose 0.9 percent to $34.14 an ounce Prices at 11:34 a.m. EST (1634 GMT)
Additional reporting by Rujun Shen in Singapore