Gold prices recovered from falls of over 20 usd yesterday as bargain hunters and physical players took advantage of recent weakness, and as the dollar came under pressure ahead of the release of US trade data later today.

At 12.36 pm, spot gold, which earlier hit a high of 599.40 usd, was quoted at 596.25 usd, up from 590.25 usd at the time of the COMEX market close in New York yesterday. Other precious metals were also higher.

Spot silver was at 11.32 usd an ounce against 11.07 usd yesterday, platinum was at 1,209.50 usd against 1,191.00 usd, while palladium was at 319.50 usd against 312.00 usd.

Gold came under heavy pressure yesterday, falling below 600 usd for the first time since June 30 as concerns over Iran's nuclear drive receded, sending oil prices to their lowest levels in more than five months.

Oil prices have recovered slightly today, with US crude trading above 65 usd, and this, coupled with bargain hunting and physical buying, has taken gold higher.

Further, weakness in the dollar ahead of today's US trade data, which is expected to reveal a widening in the July trade gap, is also supporting bullion.

Gold often moves counter to the dollar because it is seen as an alternative investment to the US currency, and bullion dealers also buy the metal as a hedge against inflation.

'Bulls in the market should take heart from the healthy physical demand which has come to the market over the last couple of days, as the Indian community look to take advantage of weaker prices ahead of the forthcoming Diwali festival and Indian wedding season,' Standard Bank said.

It added that 'this, coupled with caution about the dollar's upside potential being limited by US trade data ... may provide gold bulls with an interesting buying opportunity'.