LONDON, March 25: Gold rebounded on Tuesday after the dollar resumed its downward trend, but weaker oil prices reduced the metal’s appeal as a hedge against inflation and capped gains, analysts said.

Investors were cautious after their confidence was shaken by a recent sell-off in commodities, with gold falling more than 10 per cent last week since spiking to a record high of $1,030.80 an ounce on March 17. Platinum has fallen more than 20 per cent from this month’s record high of $2,290 before recovering, silver has slipped 20pc from a 27-year high and palladium has plummeted nearly 30pc before moving higher.

Gold touched a low of $911.50 an ounce on Tuesday before hitting a high of $935.70. It was at $929.45/930.45 by 1555 GMT, against $920.90/921.70 in New York late on Monday.

“We see some consolidation in the market between $910 and $950, but the potential clearly remains on the upside,” said Frederic Panizzutti, analyst at MKS Finance.

“Any continuation in the dollar’s downside trend would enable gold to move towards the upper side of the range and possibly break it, but after the massive price correction, the market would be cautious.” The dollar retreated broadly, posting its steepest loss against the euro in two weeks, hurt by concerns about the health of the US economy and the global financial sector.—Reuters