NEW YORK ( TheStreet ) -- Gold prices bounced back late Thursday after plummeting as much as 11% in two days as investors fled stocks and into the safe haven.

Gold for December delivery added $5.90 to close at $1,763.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,771.10 and as low as $1,705.40 while the spot gold price was rebounding more than $14, according to Kitco's gold index.

Silver prices settled 4% higher up $1.58 at $40.74 an ounce. The U.S. dollar index was up 0.33% at $74.28 while the euro was down 0.29% vs. the dollar.

Gold prices rebounded after cratering 11% over the past two-and-a-half days as the Dow Jones Industrial Average tumbled triple digits. Worries that Germany's credit rating was in doubt and that its finances might not be as strong as previously thought led European markets lower and the fear spilled over into U.S. markets.

Feeding the panic were concerns that the next bailout for Greece is now in doubt, with yields for 10-year bonds soaring more than 18% as investors required more incentive to lend money to the country.

George Gero, senior vice president at RBC Capital Markets, also attributed the rebound in gold to short covering -- traders who had been betting on a correction in gold were now buying back the at lower prices.

Gold initially plunged Thursday after the Chicago Mercantile Exchange stepped in and raised margin requirements by 27%, responding to gold's $100 one-day selloff. It now costs $9,450 to buy an 100 ounce futures contract and $7,000 to maintain it.

The CME last raised margins on August 11th by 22% and prices suffered just a modest decline. Overall, in 2011 margins for gold have increased $3,375 as compared to $11,137.50 for silver, suggesting that the damage to gold prices might not be as profound.

Although many experts acknowledge that gold prices could bounce, most seem to be anticipating more of a selloff. Experts are looking towards the $1,680-$1,650 level. Any continued good macro news out of the U.S. will also trigger more selling as investors feel better about owning stocks and turn away from the safe haven.

"I believe that gold will temporarily hold in the low $1,700s," says David Banister, chief investment strategist at, "and possibly even counter trend up into the $1,780-$1,810 range ... but I think following that there should still be some work on the downside."

Stanley Crouch, chief investment officer of Aegis Capital, thinks there is more momentum traders to get washed out, there is "likely to be a lot more extremes of volatility." Crouch also believes that if there is a global slowdown economically then investors could "pull the plug on the commodity rally in general because as demand destruction occurs ... and if the dollar strengthens relatively to the other currencies ... gold would trade off in that scenario."

Ross Norman, CEO of Sharps Pixley, takes the opposite view. He thinks the fear premium has been taken out of gold -- that is that those investors who panicked over the fear of a double dip recession and ballooning debt loads have exited the market. If Federal Reserve Chairman, Ben Bernanke, pulls a rabbit out of his hat on Friday and announces more monetary easing to jump start the economy, and hence the stock market, investors could be sucked away from gold and into stocks.

"Gold prices have been rising at a compound 16.8% per annum since the bull run began 11 years ago," says Norman, who says that the rate of price increase has accelerated since 2008 to 20.3% as safe haven seekers entered the market. "The extra 3.5% compound could possibly be attributed to the so-called 'fear factor' or safe haven role of gold. These assumptions being so, then removing that fear element in expectation of some positive noises from Bernanke would take us back to $1720 -- exactly the current market price. In short, the fear premium has been removed."

The selloff had many investors worried that gold's plummet will echo that of 1980, when the gold price reached $850 and then did nothing for 20 years. But there are some fundamental differences. In 1980, in six months, gold climbed 193% and then tanked 43% in the next two months.

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