By Lewa Pardomuan
SINGAPORE (Reuters) - Gold rebounded on bargain hunting on Tuesday after the dollar resumed losses against the euro but weaker crude oil capped gains as it reduced the metal's appeal as a hedge against inflation.
Investors were on the sidelines after their confidence was shaken by a recent broad-based sell-off in commodities. Gold has lost more than 10 percent in value since spiking to a lifetime high of $1,030.80 an ounce on March 17.
Gold hit a low of $911.50 an ounce before rebounding to $923.80/924.60 as bargain hunters resurfaced after a long Easter holiday, up from $920.90/921.70 in New York, but it was still within sight of last week's one-month low of $904.65.
"If gold were to start heading lower again, say below $900 an ounce, that might create a temporary cycle of further selling," said David Moore, an analyst at Commonwealth Bank of Australia in Sydney.
"As investors' sentiment turned, gold was then especially vulnerable to that change in sentiment. I think it's difficult to see which way gold would go in the very short term."
Platinum fell while silver and palladium gained but stayed below recent highs. Precious metals, oil, grains and other agricultural products tumbled last week in a wave of selling as funds cashed out, taking profits at record high prices.
The dollar dropped against the euro and the yen as some investors looked for the U.S. currency to resume its slide on lingering worries about the damage caused by the credit crisis.
Gold futures for April delivery on the COMEX division of the New York Mercantile Exchange added $5.6 an ounce to $924.3 an ounce but off a record of $1,033.90 an ounce hit last week.
"There's a little bit of buying from jewellery makers and other physical buyers. But I think gold lacks direction and it's going to trade in a tight range for the time being," said a dealer in Hong Kong.
Gold bars were offered at a premium of between 10 and 20 U.S. cents an ounce to the spot London prices in Hong Kong, steady from last week.
Oil fell more than $1 to below $100 a barrel on Tuesday, extending a 10 percent fall from last week's record on a build-up in U.S. crude stocks, concerns over slower energy demand and a dollar.
"Retail investors are on the sidelines and I believe they had bought gold when prices crashed last week. There's heavy stop-loss order around $903 to $906. If the stops are exercised, prices will go down below $900," said a dealer in Singapore.
"But it maybe short-lived. A firm support for gold would come from the weekly moving average at $880, while for silver, the support level is at $16.80 an ounce," he said.
Spot platinum fell to $1,868/1,878 an ounce from $1,880/1,890 an ounce late in New York. Spot palladium rose to $435/440 an ounce from $427/432 an ounce.
The most active Tokyo platinum futures rose 14 yen per gram to 5,892 yen.
Silver rose to $17.32/17.37 an ounce from $16.95/17.00 an ounce.
