--Comex December gold rises $8.70, or 0.5%, to settle at
$1,746.30 a troy ounce
--Spain bailout chatter drags on U.S. dollar, supports gold
--Gold settled at a one-month low Monday after more upbeat data
limited stimulus hopes
--Platinum, palladium also gain as South Africa strike talks
break down
By Matt Day
NEW YORK--Gold futures rebounded in thin trading on Tuesday, as
a weaker U.S. dollar and hopes that Spain was moving toward a
bailout request drew buyers back to the precious metal.
The most actively traded contract, for December delivery, rose
$8.70, or 0.5%, to settle at $1,746.30 a troy ounce on the Comex
division of the New York Mercantile Exchange.
The dollar was lower against some other major currencies Tuesday
after a Spanish official outlined some potential terms for a
bailout request. Concerns about whether Spain would ask for an
international backstop for its rattled financial system had kept
pressure on currencies seen as risky in recent weeks, sending
investors into the U.S. dollar.
A rising dollar can hit dollar-denominated gold by making the
futures appear more expensive for buyers using other
currencies.
After the bailout request chatter, and some upbeat German
economic data, The Wall Street Journal Dollar Index was recently at
69.551, down from 69.783 late Monday in New York.
Gold had settled at a one-month low Monday, dragged lower as
traders cut their bullish bets to lock in profits after the metal's
rally following the unveiling of the Federal Reserve's latest
bond-buying program last month. Accommodative monetary policies
such as the Fed's can draw investors looking for an inflation hedge
to gold and other precious metals. Similar easing moves by central
banks in Europe and Asia have also lifted sentiment in the gold
market recently.
"The ultraexpansionary monetary policy pursued by central banks
suggests that the gold price will rise again in the near future, as
do the ongoing strikes in the South African gold mines," analysts
with Commerzbank said in a note.
Gold Fields Ltd. (GFI) said on Tuesday that it will fire
thousands of workers in South Africa unless a strike is called off
by Thursday afternoon, as labor unrest in the country's mining
industry continues. Mines operated by AngloGold Ashanti Ltd
(ANG.JO) and Harmony Gold Mining Co. Ltd. (HMY) are also shut down
because of strikes.
Talks between AngloGold, Gold Fields, Harmony and striking
mineworkers and their representatives broke down on Monday.
Strikes in South Africa's massive precious metals industry began
in August at a platinum mine owned by Lonmin PLC (LMI.LN), raising
worries that the supply of platinum and palladium may be
limited.
Platinum, which had retreated from its recent peak on hopes that
strikes in South Africa were heading toward a resolution, rose 0.8%
on Tuesday to settle at $1,645.20 a troy ounce on the Nymex.
December-delivery palladium rose 1% to settle at $638.95 a troy
ounce.
South Africa is the world's largest platinum producer, the No. 2
miner of palladium, and the No. 5 gold producer, according to data
from metals consultancy Thomson Reuters GFMS.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $1,746.50; previous PM $1,736.00
Dec gold $1,746.30, up $8.70; Range $1,736.10-$1,748.90
Dec silver $32.959, up 21.60 cents; Range $32.655-$33.080
Jan platinum $1,645.20, up $12.90; Range $1,635.00-$1,652.70
Dec palladium $638.95, up $6.35; Range $631.95-$642.40
--Devon Maylie contributed to this article
Write to Matt Day at matt.day@dowjones.com