Gold climbs back on Indian demand

Gold prices have enjoyed a partial recovery from the prior session's precipitous drop on anticipation of improved demand from India.

Prices rose just above the 50-day moving average, with bullion bottoming out and rebounding after dipping below the USD$1721 threshold. In Monday trading spot gold was quoted up $4.80 at $1,725.75 while December gold traded up $2.20 at $1,726.20 an ounce.

While prices for the precious metal most likely received a boost from short covering and bargain hunting in the wake of Friday's steep decline, India, the world's leading gold consumer, is believed by many to have made a key contribution due to expectations of increased sales during the upcoming Hindu festive season.

The market now awaits the latest meeting of the US Federal Reserve's Federal Open Market Committee, held on Tuesday and Wednesday.