Gold prices continued to cut their losses on Monday as the dollar erased gains on the euro, once the European Central Bank seemed likely to tighten monetary policy as early as next month. Earlier, the precious metal fell more than 1 percent when the dollar had gained ground on the euro. But the precious metal remained under pressure as impetus from unrest in the Middle East petered out.
Spot gold was bid at $1,422 an ounce at 12:04 pm EDT (1604 GMT), against $1,427.75 late in New York on Friday. It slipped earlier to a session low at $1,409.95 an ounce. US gold futures for April delivery were down $3.30 at $1,422.90 per ounce. The precious metal rallied to a record $1,447.40 an ounce last week as violence in the Middle East and North Africa and re-emerging sovereign debt concerns in the eurozone prompted risk-averse buying of gold. But it struggled to maintain traction at that level.
"In the March rebound, the momentum wasn't there for follow-through buying," said VTB Capital analyst Andrey Kryuchenkov. "Yes, we touched a fresh high, but there were no significant longs created." Elsewhere a report from the US Commodity Futures Trading Commission on Friday showed speculators in gold and silver futures and options increased their net long positions as prices rose last week.
"Gold's ascent has ... been relatively orderly and volatility has remained relatively low despite higher spot prices," UBS said in a note. Silver also trimmed losses to $37.89 an ounce against $37.29. The metal rose 6.4 percent last week on gold's coat-tails, hitting its highest since 1980 at $38.13 an ounce. Among other precious metals, platinum was bid at $1,740.49 an ounce against $1,742.45 and palladium firmed to $744.72 against $743.97 on Friday.
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