Updated from 11:40 a.m. EDT with closing prices and a comment

NEW YORK ( TheStreet) -- Gold prices popped Tuesday as buyers returned to the market a day after the yellow metal saw its largest percentage drop since 1983. Gold plummeted 9.3% on Monday.

Gold for June delivery at the COMEX division of the CME jumped $26.30 to settle at $1,387.40 an ounce. The gold price traded as high as $1,404.20 and as low as $1,321.50 an ounce, while the spot price was gaining $13.80, according to Kitco's gold index.

"Temporarily I would say we have found a bottom," Tom Vitiello, partner at Aurum Options Strategies, said in an interview. "The option volatility has come in . . . and that's a big thing because that's telling us that people have a little bit less fear of the market continuing the decline."

Spot gold sank more than 9% on Monday, marking the largest percentage drop since Feb. 28, 1983, when the yellow metal shed 12.1%, according to Bloomberg data.

Investors and traders saw gold tumble $203.80, or 13%, over its past two sessions as liquidation pressure and long-only funds sold off huge positions in the yellow metal.

"I think it was more of a case where you had a few different events or happenings that all combined into enough pressure that triggered a whole bunch of technical selling, and a whole bunch of players that probably had been in the market more from a momentum standpoint got stopped out," said Anthem Blanchard, CEO of Anthem Vault.

Multiple analysts and brokers on Monday said in interviews they weren't sure where new technical support would build for gold, and many said the sharp downward momentum may not be finished for the week.

"I don't think you should be a buyer of gold here," said Tyler Bollhorn, founder of Stockscores.com.

Bollhorn said the price dive across Friday and Monday wiped out the weak long holders of gold.

"Average retail mom and pop were buying gold because the gold bugs told them it was the right thing to do and you had some reports coming out saying gold was going to $2,000 an ounce , and those were weak holders," said Bollhorn. "They weren't holding it for any other reason than they thought it was going higher."

Gold was showing a glimmer of new strength on Tuesday morning, despite U.S. economic data that suggested inflation may be easing. Investors often view the precious metal as a hedge against inflation -- the Federal Reserve's massive quantitative easing programs since the financial crisis have driven up speculation that the monetary stimulus could cause inflation. To this point, high inflation hasn't been an issue.

The Consumer Price Index fell 0.2% in March, which followed February's 0.7% increase. Economists polled by Thomson Reuters were expecting the index to remain unchanged.

Silver prices for May delivery added 27 cents to close at $23.63 an ounce, while the U.S. dollar index was dropping 0.64% to $81.79.

Gold ETF SPDR Gold Trust ( GLD) was climbing 0.5% to $131.97. The massive gold ETF droppped more than 8.5% on Monday, and has plummeted 18.9% in the past three months.

Uncertainties in Europe due to Cyprus' recent financial struggle and weakening economic data from China have battered gold ETF trading.

"Recent price volatility has been solely driven by ETF paper speculators fleeing the market in a panic herding to other investments in search of better returns," Louis Palafoutas, CEO of MorganGold, said in an email.

iShares Gold Trust ( IAU) was gaining 0.49% to $13.26.

Gold mining stocks were mixed on Tuesday. Shares of Randgold Resources ( GOLD) were adding 1.1%, while shares of Barrick Gold ( ABX) were falling 5%.

-- Written by Joe Deaux in New York.

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