Gold settled above $1,200 on Tuesday as bargain hunters appeared after prices fell to six-month lows of around $1,200 an ounce.
"People are trying to avoid paying higher taxes than necessary for positions that will be marked-to-market at the end of Dec. 31, so there's quite a bit of portfolio evening out that's going on, so to speak,'' said George Gero, a gold market analyst and vice president at RBC Capital Markets Global Futures in New York.
"There's also been some short-covering and bargain hunting that has emerged since we got to below $1,200 in the last couple of days.''
Gold tumbled to six-month lows of around $1,185 on Friday after the Federal Reserve said it would start scaling back its long-running monetary stimulus program, which had helped drive the market to record highs above $1,900 in 2011.
Years of increased central bank liquidity and record-low interest rates encouraged investors to put money into non-interest-bearing assets and safe havens such as gold.
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