Gold bounces, ETF holdings inch up

(Reuters’ Lewa Pardomuan) Gold regained strength on Tuesday, reversing the previous session’s losses, and a rise in ETF holdings for the first time in a week suggested some investors still had faith in the precious metal despite the improving tone of U.S. economic data.

Strong oil prices and a deadly unrest in Egypt could underpin sentiment, but trading slowed down in Asia ahead of the Lunar New Year celebration later this week. Bullion posted its first monthly decline in six months in January.

Spot gold added $5.21 to $1,337.11 an ounce by 0326 GMT after falling as low as 1,322.90 on Monday. Gold struck a record around $1,430 in December on worries the euro debt crisis would spread and uncertainty in the U.S. economy.

“It sure is so quiet. If I drop a pin now, I can hear the echo right away,” said a dealer in Singapore.

U.S. April gold futures rose $3.4 to $1,337.9 an ounce, having settled around $7 lower after data showed factory activity in the U.S. Midwest hit a 22- year high in January and another report showed consumer spending ended 2010 on a firmer footing.

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