--Comex June gold up $19.50, or 1.3%, at $1,556.20 a troy ounce --Gold holds above its late-December intraday lows, spurring short covering By Matt Day Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Gold futures rebounded on Thursday, as some investors who had bet on declining prices closed those positions after the metal slumped to a 10-month low. The most actively traded contract, for June delivery, was recently up $19.50, or 1.3%, at $1,556.20 a troy ounce on the Comex division of the New York Mercantile Exchange. Gold futures slumped for four consecutive sessions through Wednesday, crumbling to the lowest settlement price since July 2011 as worries about Europe's financial system boosted demand for the U.S. dollar at the expense of precious metals. But futures clung above a key price point, gold's late-December intraday lows, spurring some buyers who had bet on lower prices during the market's selloff to close out those bets, TD Securities said in a note. Some buyers also stepped in Thursday on the view that the minutes from the Federal Reserve's latest policymaking meeting, released after gold's settlement on Wednesday, left open the door to more central bank support for the economy. Gold can gain from such moves, as investors seek a store of wealth in the event accommodative monetary policy weakens paper currencies. Gold's decline on Wednesday was the 11th in the last 13 trading sessions, largely moving in the opposite direction of the U.S. dollar as Europe's woes drew a flurry of interest in U.S. government debt. Europe's debt crisis has weighed on precious metals prices during the last year as investors turned to cash, and the dollar in particular, for safety, causing that currency to rise and making dollar-denominated gold appear more expensive for buyers using other currencies. Greece's political gridlock and coming elections caused some investors to bet that the country could lose its international financial support, or perhaps leave the European currency union. Those concerns, as well as challenges to the budget-cutting measures of other euro-zone members, raised the borrowing costs for Spain and Italy, again underlining the prospect that a Greek exit could rattle the banking systems of much larger economies. "For now, the investor community remains spooked and is unlikely to return to the (gold) market with full vigor unless we have a monumental credit event in Europe or a pronounced dollar retreat," VTB Capital analyst Andrey Kryuchenkov said in a note. --By Matt Day, Dow Jones Newswires; 212-416-4986; matt.day@dowjones.com --Francesca Freeman contributed to this article.

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