Oxford, MS 9/27/2011 (PennyPayDay) – Gold gained for the first time in five days in New York as the biggest three-day drop in 28 years spurred some investors to buy the metal on concern about economic growth and debt crises.Bullion slumped 12 percent in the previous three days as some investors sold to cover losses in other markets, which plunged on concern there may be another global recession. The metal has slid 13 percent from its Sept. 6 record and last week’s plunge prompted CME Group Inc. (CME) to raise margin requirements on futures contracts. Physical demand for gold is “exceptionally strong,” UBS AG said today in a report.
“Although not many are yet prepared to dip their toes back in the market, there is a small but growing group who believe this pullback will prove to be a good buying opportunity,” Edel Tully, a London-based analyst at UBS, wrote in a report. “Gold needs to stabilize for now, after suffering a good deal of reputational damage with recent wild moves.”
Gold for December delivery gained $73.20, or 4.6 percent, to $1,668 an ounce by 8:16 a.m. on the Comex in New York. It dropped to $1,535 yesterday, the lowest level since July 8, and capped the biggest three-day decline since March 1983. Immediate-delivery gold was 2.5 percent higher at $1,666.40 in London.
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