April 24 (Reuters) - Gold prices rebounded on Thursday as investors bought bullion following a sharp decline in the previous session, while the focus remains on U.S.-China trade tensions.
Spot gold was up 1.6% at $3,338.79 an ounce, as of 1140 GMT. Bullion fell as much as 3% on Wednesday in its worst daily performance since late November.
U.S. gold futures gained 1.7% to $3,349.80.
"Gold's pullback earlier has cleared some of the froth from its latest surge. That, in turn, attracted some buy-the-dip action amid still-persistent global trade war fears," said Han Tan, chief market analyst at Exinity Group.
"Given the still-evident tailwinds for this precious metal, gold bugs could ultimately conquer the $3,500 level with conviction."
Non-yielding bullion, traditionally seen as a hedge against global instability, has risen over 27% so far this year.
The International Monetary Fund made sharp reductions to its outlook for both U.S. and global growth this year, with President Donald Trump's tariff policy the main reason behind the downgrade.
"If the economic outlook deteriorates further, then there's no reason why gold could not receive another strong bid," said Ole Hansen, head of commodity strategy at Saxo Bank.
However, U.S. Treasury Secretary Scott Bessent said U.S. economic growth will surpass the IMF's revised estimate of 1.8%, down from 2.7% in January, if Trump administration's policies are implemented.
He also said that the excessively high tariffs between the U.S. and China are unsustainable, and must be reduced before trade negotiations can proceed.
Stocks drifted on Thursday and a rebound in the dollar lost traction as investors tried to sift through the noise from the Trump administration.
Spot silver fell 0.3% to $33.44 an ounce, platinum was steady at $972.15 and palladium was down 0.2% at $942.28.
Reporting by Rahul Paswan in Bengaluru; Additional reporting by Sarah Qureshi
