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Gold Rebounds as Decline Below $800 Spurs Buyers; Silver Gains

Pham-Duy Nguyen
Bloomberg [1]
Monday, Oct 20, 2008

Gold rose after the lowest price in more than a month attracted investors. Silver also gained.

Gold dropped 8.3 percent last week, touching $772.20 an ounce, the lowest price since Sept. 15. UBS AG said gold will trade at $800 in one and three months, compared with previous forecasts of $925 and $975.

“After the recent declines, gold has found some support from Indian physical demand,” said John Reade, a UBS metals strategist in London. “Other Asian demand has picked up, too. Although safe-haven buying of gold continues at a good pace, this buying is insufficient to counter financial flows.”

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Gold futures for December delivery rose $9.80, or 1.2 percent, to $797.50 an ounce at 9:06 a.m. on the Comex division of the New York Mercantile Exchange. The metal reached a record $1,033.90 on March 17.

Silver futures for December delivery climbed 22.5 cents, or 2.4 percent, to $9.56 an ounce. The price dropped 12 percent last week.