Gold prices fell sharply Tuesday on stress over Europe but the metal regained much of the lost ground to close down 0.8 percent on reports that retail investors are buying more gold-backed exchange-traded products.
The yellow metal had fallen 2.5 percent after an unexpected report that Chinese manufacturing slowed more than expected and Greece's announcement that will hold a referendum on whether to accept its next scheduled tranche of bailout money.
But by the end of the day it had trimmed those losses to 0.8 percent.
Gold investment demand has picked up over the past week, and total metal in trust across the 25 exchange-traded products we track rose by 0.1 metric tons on the last day of the month, said Barclays Capital analyst Suki Cooper.
Preliminary estimates for October show inflows reached 17 metric tons last month after a soft start to the month.
Gold ended the day more strongly than stocks, with the Dow Jones Industrial Average, the Nasdaq Composite and the S&P 500 all down in mid-afternoon trading about two percent.
Prices for silver, which gets half its demand from industrial customers, plunged 6.6 percent -- and shares of numerous silver mining companies had plunged 10 percent or more -- before they trimmed those losses to 4.7 percent.
The gray metal's decline partly reflected a report from the Institute for Supply Management, which said U.S. manufacturing fell to 50.8 percent in October from 51.6 percent in September. Most economists had expected a stronger number.
Gold for December delivery fell $13.40 to $1,711.80, while spot gold fell $5.24 to $1,708.03.
Silver for December delivery fell $1.62 to $32.73, while spot silver fell $1.46 to $32.73.