Gold’s 10 percent gain in 2011 extends run to 11th year

Bullion posted a gain of 10 percent for 2011, its smallest annual rise in three years. It remains down 18 percent from a record $1,920.30 set in September, and finished the fourth quarter with its first quarterly loss in more than three years.

Analysts said a rebound rally is possible in the near term but gold is far from retesting all-time highs.

“Gold’s technical set-up since late yesterday could be the start of a bullish reversal and a short-term bottom,” said Michael Matousek, senior trader at U.S. Global Investors Inc (GROW.O), which has $2.5 billion in assets.

Spot gold rose 1.2 percent to $1,564.69 by 2:26 p.m. EST (1926 GMT), but it has limped into the end of the year with a 10 percent drop in December.

Gold fell heavily in December, as hedge funds scrambled for cash to meet client redemptions and European banks trimmed their gold holdings to raise capital.

U.S. February gold futures contract settled up $25.90 at $1,566.80, snapping six straight sessions of losses.

The metal enters the new year on an uncertain footing and appears to have lost its safe-haven status.

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via Gold’s 10 percent gain in 2011 extends run to 11th year | Reuters.

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