Gold edges up from multi-month low

MADRID (MarketWatch)�Gold futures rose slightly in European trading hours on Monday, moving off a multi-month low reached in the previous session.

Gold for delivery in April GCJ3 �rose $2.10 to $1,611.60 an ounce in electronic trading, with some bounce in Asia as well. U.S. markets are closed Monday for the Presidents Day holiday.

On Friday, gold dropped $26, or 1.6%, to settle at $1,609.50 an ounce on the Comex division of the New York Mercantile Exchange. That was the lowest settlement price for a most-active gold contract since Aug. 15.

As a perceived safe-haven asset, gold has been punished since the end of last year, partly on a more upbeat view of world growth, said commodity strategists at Deutsche Bank.

However, �we believe that there remains support [for gold] at $1,600 an ounce. Furthermore we believe that on [a] 12-month time frame,� both gold and silver appear to offer �compelling value,� the strategists said.

Click to Play Week ahead: Sequester looms

Next week brings reports on housing and consumer prices, but the spotlight may be dominated by the approaching March 1 spending cuts known as the sequester.

Still, other analysts said that the market needs to see some signs of physical demand from places like China�returning after a weeklong holiday�to break the losing streak.

�The break below $1,625 in gold wrong-footed us,� analysts at Barclays wrote in a note to investors on Monday. �Below $1,584 would target $1,525 before we look for a base. Falling volumes with the move lower in gold warn of declining investor commitment.�

And if physical demand doesn�t start to respond to the recent pullback, �the floor for prices is set to become increasingly fragile,� they warn.

March silver SIH3 � edged up 7 cents to $29.92 an ounce in European trading on Monday.

March palladium PAH3 �rose $6.10 to $759.25 an ounce while April platinum PLJ3 PLJ3 PLJ3 PLJ3 rose $17.50 to $1,695.20 an ounce.

Platinum-group metals remain supported by supply uncertainty, the Deutsche Bank strategists said.

�We prefer palladium given its superior long-term fundamentals,� they added.

Copper for delivery in March HGH3 �declined 5 cents to $3.69 a pound.