Spot gold was steady on Monday, as the dimmed outlook for the US economy and persistent worries about eurozone nations' debt problem supported sentiment. The weaker-than-expected payrolls data last Friday dampened hopes that the US economy would bounce quickly from a slowdown in the first half of the year, helping gold stage a 3.9-percent weekly rise, its best week since November 2009.
"If we see something that confirms further the weakness of US economy we may see gold benefit from that," said Darren Heathcote, head of trading at Investec Australia. Spot gold rose to a 2-1/2-week high of $1,546.69, before easing to $1,544.74 an ounce by 0642 GMT. US gold edged up 0.3 percent at $1,545.40. Ongoing worries about eurozone nations' sovereign debt and uncertainties around the debt ceiling talks at the US Congress also helped boost gold's safe-haven appeal.
Gold rose to an all-time high of $1,575.79 on May 2. On the physical market, buyers have moved to the sidelines after prices advanced nearly $60 in the previous week while scrap sales trickled in, dealers said. "We've seen some scrap selling but in small amount," said a Singapore-based dealer, adding that scrap sellers are eyeing $1,550 level to start selling in larger volume.
"We don't see much buying at current price level." Physical demand is low during summer months when India, the world's largest gold consumer, goes through the monsoon season during which farmers are busy sowing and gold sales slow. Rural areas account for about 70 percent of India's annual gold consumption. Spot silver lost 0.4 percent to $36.50 an ounce, off the one-month high of $36.82 reached last Friday. US silver was little changed at $36.54.
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