May 30, 2012 / 10:38 AM / 5 years ago

PRECIOUS-Gold rallies late as equities, commods tumble

* Safe-haven buying seen amid sharp equities, commods losses
    * Rebounds off technical support around $1,530
    * Gold set for fourth monthly drop, outlook remains weak

 (New throughout, updates prices, market activity)	
    By Frank Tang	
    NEW YORK, May 30 (Reuters) - Gold staged a dramatic
mid-session recovery in heavy trade on Wednesday, rebounding
more than $30 an ounce after sliding earlier along with risky
assets, then jumping as safe-haven buying returned after a
technical bounce above the key support level of $1,530 an ounce.	
    Some traders suggested that bullion, which has traded with
riskier assets like equities for much of this year, may have
found a safe-haven bid again. They noted that its rebound came
on a day when equities, crude oil and other commodities tumbled,
while the dollar and U.S. Treasuries rallied on jitters about
the mounting euro zone debt crisis.	
    "This morning's reversal is indicative that people are
starting to come to grips with the fact that there isn't any
fast and easy solution in Europe. And if things start to really
get out of hand in Spain and Italy, that means gold can catch a
bid," said James Dailey, portfolio manager of TEAM Financial
Asset Management.	
    Bullion investor sentiment remains fickle as the price of
gold has lost $100 in the last four weeks. It was down 6 percent
in May, its biggest monthly decline since December.	
    The rebound on Wednesday brought gold back to about where it
stood at the end of 2011.	
    	
     
   	
    	
    Spot gold was up 0.7 percent at $1,565.30 an ounce by
2:28 p.m. EDT (1828 GMT), having hit a two-week low of
$1,531.49.	
    U.S. COMEX gold futures for June delivery settled up
$14.70 an ounce at $1,563.40, with volume strong for a second
straight day at a pace that nearly doubled its 30-day average,
preliminary Reuters data showed.	
    Tuesday's COMEX trading volume hit an all-time high at
484,721 lots, surpassing the previous record of 483,429 lots
registered on Aug. 24, 2011. 	
    However, Tuesday's turnover included Globex electronic
trading volume between Sunday evening and the U.S. Memorial Day
holiday on Monday. Tuesday's figure was also inflated by active
position rolling from the June to August contracts before the
June delivery period.	
    Earlier this year, the metal had gained 15 percent after the
U.S. Federal Reserve said it would keep interest rates near zero
until at least late 2014.	
    Since then, however, investors have shunned gold due to a
lack of economic stimulus from central banks. The previous
session, the safe-haven metal actually fell more than other
commodities on jitters surrounding the European sovereign debt
crisis.	
    "Gold did function as a flight-to-safety vehicle, but only
to a small degree and we can very easily test those lows again
tomorrow or the next day," said Bill O'Neill, partner at
commodities wealth manager LOGIC Advisors.	
    "There was still not much vitality and we still don't see
any speculative fervor," O'Neill said.	
    Among other precious metals, silver rose 0.7 percent
to $28.02 an ounce. Platinum was down 1.8 percent at $1,399.25
an ounce, while palladium edged up 1 percent at $601.97
an ounce, as both platinum group metals followed industrial
metals which fell sharply on economic concerns.	
	
 2:28 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold JUN   1563.40  14.70   0.9  1530.40 1569.00   75,852
 US Silver JUL  27.983  0.192   0.7   27.355  28.145   45,475
 US Plat JUL   1401.20 -26.90  -1.9  1387.10 1431.40   13,898
 US Pall JUN    604.70   1.15   0.2   590.00  606.90    3,069
                                                              
 Gold          1565.30  10.76   0.7  1532.60 1569.16         
 Silver         28.020  0.200   0.7   27.400  28.170
 Platinum      1399.25 -25.90  -1.8  1390.75 1428.49
 Palladium      601.97   0.85   0.1   592.00  606.75
                                                              
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        337,921   181,520   192,594     23.14    1.26
 US Silver       49,810    52,070    51,869      33.8    1.82
 US Platinum     15,049     6,794     7,972        18    0.00
 US Palladium     9,014     4,948     4,505                  
                                                              
 	
 (Additional reporting by Jan Harvey and Amanda Cooper in
London; Editing by Dale Hudson; Editing by David Gregorio)

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