Gold prices recovered in Asian trade Wednesday after an overnight plunge of nearly two percent mainly on global stocks rally.

Gold for immediate delivery was seen trading at $ 1163.51 an ounce at 12.00 noon Singapore time after hitting a near three-month low on Tuesday.

U.S. gold futures for August delivery was seen trading at $1,162.60 per ounce at the same time as the position adjustment related to expiring of the contract pushed prices close to a key technical support.

On Tuesday, gold fell to the lowest price in three months as a rally in global equities eroded demand for the precious metal as an alternative investment.

August delivery settled at a three-month low at $1,158 an ounce, down $25.10. Gold has slumped by more than $100 since reaching a record $1266.50 an ounce on June 21.

Stocks in Asia and Europe rallied, while the fourth straight gain by the Dow Jones Industrial Average was enough to erase the index's loss for the year.

Gold futures for December delivery fell $25.20, or 2.1 per cent, to $1161.80 an ounce on the Comex in New York, the lowest settlement for a most-active contract since April 26.

Meanwhile, holdings in the SPDR Gold Trust, the biggest exchange- traded fund backed by bullion, dropped to 1301.74 metric tons Tuesday.