Bloomberg: Gold Extends Rebound on Demand After Drop to Lowest Since 2010

Gold extended a rebound from its lowest level since September 2010 as investors weighed the prospect of increased purchases against reduced monetary stimulus by the U.S. Federal Reserve.

Cash bullion rose as much as 0.4 percent to $1,301.78 an ounce and was at $1,296.58 at 9:12 a.m. in Singapore, gaining for a second day. Gold’s 14-day relative strength index was near the level of 30 that indicates to some analysts who study technical charts that a rebound may be imminent.

Gold slumped to $1,269.46 last week, the cheapest since Sept. 16, 2010, after Fed Chairman Ben S. Bernanke said that the central bank may begin reducing stimulus this year and end the program in 2014 should the economy continue to improve. The Fed currently buys $85 billion of Treasury and mortgage debt each month. In China, the seven-day repurchase rate, a measure of interbank funding availability, climbed to a record last week.

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