Gold hovered below $600 an ounce on Monday after oil weakened on doubts about Opec's pledge to cut output, with the metal's failure to hold on to last week's gains likely to exasperate some investors. The physical sector was slow in Southeast Asia, with main buyer Indonesia away for the Muslim Eid-ul-Fitr holiday this week.
Markets in Thailand were closed on Monday for King Chulalongkorn Day. Spot gold hit an intrude high of $592.50 an ounce and was at $591.40/592.40, slightly lower than $591.90/592.90 in late New York trade.
"If it keeps going sideways, investors are going to get impatient with it anyway," said commodities analyst Tobin Gorey of Commonwealth Bank of Australia. Gold rose to its highest in more than two weeks at $602.20 on Friday before selling kicked in after crude oil reversed gains.
Gold often takes its direction from the oil market as rising energy costs tend to boost its appeal as a hedge against inflation. Dealers said gold would have to break a resistance of $605 and stay above that level to prevent investors from liquidating their positions.
Gold was now trading around $130 an ounce lower than the 26-year high of $730 hit in mid-May. Crude oil fell as the market struggled with doubts about Opec's resolve to curb output and high US inventories. Opec announced a surprise agreement to curb output by 1.2 million barrels per day on Friday larger than an expected cut of 1 million bpd.
It was the deepest cut since January 2002 and equal to about 4.3 percent of September supply. "My customers are telling me they have already bought enough gold.
The dollar inched up to 118.80 yen from 118.70 yen in late US trade. The euro was little changed at $1.2615. Platinum fell to $1,074/1,079 an ounce from $1,076/1,081 late in New York. Palladium fell to $322.50/327.50 an ounce from $325/330 in New York. Silver edged down to $11.81/11.88 an ounce from $11.85/11.92 late in New York.
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