Gold rebounds amid bottom fishing, U.S. data supports

Investing.com - Gold prices rose on Tuesday after investors snapped up nicely priced positions in the yellow metal, which plunged on Monday after fears brewed the commodity is due for a longer-term bear market.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 1.64% at USD1,383.45 a troy ounce in U.S. trading on Tuesday, up from a session low of USD1,322.25 and down from a high of USD1,403.35 a troy ounce.

Gold futures were likely to test support USD1,322.25 a troy ounce, the earlier low, and resistance at USD1,494.95, Monday's high.

Gold prices plunged on Monday on growing sentiments that the 12-year bull market may be due for a breather.

Sentiment that eventual recovery in the U.S. will prompt the Federal Reserve to wind down monetary stimulus programs further fueled the selloff, as loose policies tend to send the yellow metal gaining by weakening the dollar.

On Tuesday, bottom fishers jumped in and bought on sentiments that precious metals were oversold.

Still, trading was cautious, as economic indicators released earlier painted a picture of a still-struggling U.S. economy but one that is recovering nonetheless and will likely call for tighter policy at the Federal Reserve down the road.

The Census Bureau reported earlier that building permits rose by 902,000 in March, less than market calls for 940,000 increase and also below the 968,000-unit rise in February.

Housing starts, however, rose by 1.036 million units last month, beating market forecasts for an increase of 930,000 after a rise of 986,000 in February.

Separate government data revealed that consumer inflation dipped in March due in part to falling fuel prices.

The U.S. Bureau of Labor Statistics reported earlier Tuesday that the country's consumer price index fell 0.2% in March after rising 0.7% in February, missing expectations for a 0.1% gain.

Separately, the U.S. core CPI, which is stripped of volatile food and energy costs, rose 0.1% in March,  missing expectations for a 0.2% increase after a 0.2% rise the previous month.

In addition, the Federal Reserve reported that U.S. industrial production rose 0.4% in March, beating expectations for a 0.2% gain after a 1.1% increase the previous month, which gave investors reason to abandon the safe-haven dollar and seek higher-yielding investment classes, which brought up gold prices.

Elsewhere on the Comex, silver for May delivery was up 1.44% at USD23.697 a troy ounce, while copper for May delivery was up 1.02% and trading at USD3.307 a pound.