Gold rebounds, heads for 11th annual gain

Gold rebounded in New York, extending an 11th annual gain, on speculation prices at a five-month low will spur demand from jewellers and investors. Bullion fell 4.8 per cent over the previous six sessions to the lowest level since July 7 as gains by the dollar against the euro curbed demand for the metal as an alternative investment. Jewellery usage in India, the world's biggest buyer, rose 12 per cent in 2011's first quarter from a year earlier, according to World Gold Council figures. "January and February are usually good months in India, and a lower gold price might attract some buyers," said Marc Ground, a commodities strategist at Standard Bank Plc in Johannesburg. "While we haven't seen physical demand pick up yet, maybe people are anticipating it for next year." Gold futures for February delivery climbed 1.8 per cent to $1,568.40 (Dh5,760) an ounce on the Comex in New York by 7.59am, ending the longest slump since March 2009. Prices are up ten per cent this year. Climbing Dennis Gartman, the economist and editor of the Gartman Letter, is "about to become bullish" on gold after being neutral on the market since mid-November. "We did not expect to see gold hold as well as it has or did in the past 24 hours," Gartman wrote Thursday. Holdings of gold in exchange-traded products are climbing for the first time in three weeks, according to data compiled by Bloomberg. Assets rose 0.3 per cent last week after falling 1.5 per cent the past two weeks. Silver for March delivery jumped 2.8 per cent to $28.075 an ounce, bringing the 2011 drop to ten per cent, the first drop in three years.