Sydney - Spot gold recovered some ground in Asia Monday following on from Friday"s vicious 7% selloff, bouncing on bargain hunting and the view that the price plunge was overdone in a financial market still in the midst of a crisis of confidence. Equity markets recovered some of the torrid losses from Friday, reacting to G7 ministers gathered in Washington over the weekend foreshadowing coordinated action to combat the credit crisis, as well as a constructive meeting of euro-zone heads of government. Bargain hunting and some interest from the jewelry fabrication sector helped spot gold prices claw back some of the losses that cut gold to a low of $827.80 a troy ounce Friday. Comex gold futures closing at $859/oz Friday, down $27.50/oz, was 'overdone' in an illiquid market where funds were forced to liquidate to shore up faltering equity portfolios despite widespread risk-aversion that usually benefits gold, said Charles Dowsett, head of precious metals at ABN Amro in Sydney. Gold needs to make swift gains to at least $975/oz in order to reflect current financial market conditions, said Kitco Analyst Jon Nadler. 'Until and unless bullion comes to be regarded as the only viable currency by all individuals, everywhere, the values being talked about in the perma-bulls camp are not in the cards,' said Nadler. Some bulls forecast gold to reach $1,200-$1,500/oz or even more in the next few months, while central banks" reluctance to lend gold amid strong demand for gold bars and coins has added to the tightness in the market. 'Whether or not the metal comes into play as an asset that central banks might seek to hoard or mobilize in their attempt to right the world economic ship remains to be seen,' he said. Physical dealers are struggling to fill orders from retail investors that have stepped up purchases, worried about the state of the global financial sector and worsening economic outlook. That scarcity might come to a head when the Comex December benchmark contract goes off the board Nov. 20. The contract"s expiry will bring a 'real test' of the level of tightness, said Dowsett, with many participants buying into Comex futures as a way to get gold through taking physical delivery. 'The last two trading days will be very volatile before the contract goes off the board,' he said. At 0612 GMT, spot gold traded at $860.70/oz, up $10.80 on the New York close, and silver was at $10.52/oz, up 35 cents. Platinum was up $1.00 at $988.00/oz, and palladium was down $3.00 at $186.00/oz.