Gold rebounded on Wednesday as bargain hunters resurfaced after the metal fell more than 3 percent in New York following a sharp drop in crude oil prices.

Platinum tumbled to its lowest level since mid-June because of a sell-off in Japanese futures <0#JPL:>, silver hovered below $11 an ounce and palladium fell to its lowest level in nearly three weeks.

Spot gold hit an intraday low of $573.70 an ounce, matching the low in New York, before recovering to hit an intraday high of $577.40.

It was quoted at $576.25/577.00 by 0349 GMT, steady from $576.50/577.50 in New York.

"There's of course bargain hunting. From today, I would probably be a buyer because we've had quite a steep fall. The market may be trying to find a bit of support," said a dealer in Singapore.

"I think the range should be $570 to $680 for the quarter," he said.

Benchmark U.S. crude futures fell to a 7 1/2-month low in Asia, extending a near 7 percent slide over the previous two days, pressured by ample U.S. fuel stocks and no evidence that other OPEC members are joining Nigeria and Venezuela in cutting output.

Gold shrugged off news that North Korea plans its first nuclear test.

Dealers said festive demand in main consumers in Asia, including India, would offer support for the metal.

"You'll see that physical demand in the key buying seasons in the fourth quarter will come back, and we think that's positive for it," the World Gold Council's Chief Executive James Burton told Reuters on Tuesday.

Gold prices have lost more than 20 percent since hitting a 26-year high of $730 in May, when investors diversified into precious metals.

"The World Gold Council is concerned because we see the investment interest in gold has created more volatility. Because of that, the core consumers of gold, who were generally the jewellery buyers, were put off by that," Burton said.

He was referring to a 24-percent drop in the second-quarter global jewellery demand to 562 tonnes from last year's quarter. "What we have seen with core customers is that they are very happy to buy on a rising price trend as long as they have have confidence in that."

"But when it fluctuates wildly as it did in the beginning of the year, it impacts their decision to buy," he said.

The benchmark August 2007 gold contract <0#JAU:> on the Tokyo Commodity Exchange fell by the daily 60-yen limit to 2,216 yen a gram on heavy liquidation as oil's fall reduced the metal's appeal as an inflation hedge.

"Those bullish on gold will be hoping that more physical buying, or a weaker dollar on the back of more disappointing U.S. economic news may be the catalyst to push gold higher," Investec Australia said in a daily report.

"But we cannot help feeling that with gold close to testing the $573 level again, the momentum to push even lower is building. A break of $573 will likely see gold testing $560 and possibly $550," it said.

The dollar edged up to 118.05 yen from around 117.95 yen in late New York trade. The euro was nearly flat at $1.2730 .

Silver hit a two-week low of $10.74 an ounce, down from $10.93/11.00 late in New York.

Platinum tumbled to its lowest level in nearly four months at $1,105 an ounce. It was last quoted at $1,118/1,123 in New York.

The most active contract on TOCOM platinum futures <0#JPL:>, currently August 2007, tumbled to 4,131 yen per gram, its lowest since mid-June.

Palladium fell to its lowest in nearly three weeks at $294 an ounce, down from $300/305 late in New York.