Gold Rises by One Percent after Hitting Two-Month Low

Even though gold fell to as low as $872.90 on Tuesday, it was able to rally some and reach as high $894, up from $884.20/885.40 an ounce late in New York, before settling at $891.50/892.40.

The 3 percent drop on Tuesday continued the plunge in gold prices since the high of $1,030.80 it reached in March.

In the short term, analysts think investors will hold back and wait to hear the upcoming release of data on U.S payrolls on Friday.

"We are trying to recover some ground and may succeed depending on the data releases in the U.S., but that could be temporary respite," said Tom Kendall, metals strategist at Mitsubishi Corporation.

"It's too early to be wholly convinced that the time is right to go long again for strategic investors. The market needs to steady for a while and it's possible that we will set up a range here between $875 to $900 for a week or two."