Gold fell in Asian trading on Monday and hovered near its lowest in 10 days, as the US dollar rose on expectations the Federal Reserve may hasten the pace of interest rates hikes. Higher rates tend to boost demand for dollar deposits and may prompt some funds to switch out of assets such as commodities. Spot gold was trading at $437.10/437.80 an ounce, down from $439.00/439.70 late in New York.
Trading was muted due to a holiday in Japan and ahead of the upcoming Easter holiday.
"Of course gold is bearish," said one dealer in Singapore, Southeast Asia's biggest bullion trading centre.
"I think $429 and $430 will provide major support and I don't think a rebound above $435 will change sentiment at all," said the dealer, referring to gold's immediate support.
Gold had slid to $435.60 on Friday amid heavy selling after failing to reach a previous high of $445, partly as a firming dollar made dollar-priced gold more dear in other currencies.
The benchmark February gold contract on the Tokyo Commodity Exchange ended down eight yen per gram at 1,483 yen on Friday, a one-week low.
In the currency market, the euro was trading at $1.3256, down from New York's close of $1.3311.
Gold often goes in the opposite direction of the dollar as investors use it as a currency alternative.
Dealers have factored in a quarter percentage point rise in US interest rates this week by the US Federal Reserve's policy makers, who will meet on Tuesday.
They will turn their attention to the statement accompanying the rate decision to see if Fed is willing to take more aggressive action in coming months by removing the word "measured" when it refers to rate increases.
Some dealers said the gold market would be watching next week's CFTC Commitments of Traders data to get fresh idea on the funds' long position in New York, which has weighed on sentiment.
The CFTC reported on Friday that the net speculative long position in Comex gold rose to 111,122 contracts as of March 15 from 70,477 contracts on March 8.
N M Rothschid said in a report it is likely that next week's CFTC figures wil show a reduction in the long position.
Investors may become disillusioned as the price has failed to rise above $444, and may therefore liquidate positions, it said.
In other precious metals, spot platinum was at $876/881 an ounce, against $874/880 in late US trade.
Palladium was at $198/203, against $199/202. Silver was at $7.29/7.31, compared with $7.36/7.39.
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