Gold rebounds on physical demand

Gold futures on the COMEX division of the New York Mercantile Exchange futures rebounded from a 34-month low on Friday, but still suffered its steepest quarterly decline on record. The most active gold contract for August delivery rose 12.1 dollars, or 1.0 percent, to settle at 1,223.7 dollars per ounce. But it still left gold with a loss of more than 23 percent for the second quarter, the steepest quarterly decline since the start of Comex gold trading in 1975. Gold prices rebounded on signs of increased demand for jewelry, coins and bars. The gold market did see some physical buying come in a bit on the day after it suffered great losses these days and, if that continues it will provide some support, according to market analysts. In addition to some short covering, analysts say, demand for gold as a hedge against inflation faded as the U.S. Federal Reserve signaled it was beginning to contemplate scaling back its program of quantitative easing. The traditional drivers of demand for gold have weakened or reversed in the last few months. Gold's status as a haven itself had been undermined by the metal's recent weakness and volatility at the same time markets were reflecting renewed confidence in the U.S. dollar Silver for July delivery rose 91.7 cents, or 4.94 percent, to close at 19.470 dollars per ounce.