Gold has rebounded 6 percent from its four-year low on Nov. 7, and central banks may be lending a helping hand.
December gold futures settled at $1,197.10 an ounce Tuesday on the Comex, after hitting $1,204.10 earlier. They had slumped to $1,130.40 Nov. 7.
The Russian central bank is playing a supporting role for the precious metal. It has bought about 150 metric tons of gold this year, Governor Elvira Nabiullina told the country's lawmakers Tuesday, Bloomberg reports.
That compares to purchases of about 77 tons in 2013, according to the International Monetary Fund. It would also mean the central bank has acquired about 35 tons since Sept. 30, according to Bloomberg.
"The fact that Russia is buying more gold instead of diversifying into another currency or buying more dollars is a big positive," Frank Lesh, a trader at FuturePath Trading, told the news service.
While overall purchases of bullion fell in the third quarter to the lowest level in almost five years, buying by central banks may increase by up to 22 percent this year, the World Gold Council estimates.
Meanwhile, Swiss voters take to the polls Nov. 30 to decide whether the Swiss National Bank should expand its gold holdings and halt any more dumping of Swiss gold.
The metal's rebound Tuesday came as the dollar retreated from recent gains.
"Movements in the dollar continue to be the major catalyst for moves in gold, with sharp rallies predominantly the result of short-covering," MKS Capital trader James Gardiner told Reuters.
"There should be initial support on the downside around $1,181-82, and on the topside, $1,200 will be the key resistance."
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