Gold weaker in Asia on firmer dollar

Gold was weaker in Asia on Monday as a firmer dollar against the yen encouraged Japanese selling, but trade was thin due to holidays in some parts of Asia, including China, traders said.
Spot bullion was at $466.50/467.00 an ounce, down from $468.80/469.50 in late New York trade on Friday. In trade, gold lost more than $3 to $465.50/466.25.
"The market opened at around $468 but immediately was sold," a bullion trader in Hong Kong said. With trade remaining subdued due to public holidays on Monday in China, Australia and South Korea, some selling orders from Japan pushed the market to a low of around $466, he said.
He put support for spot gold at $462 and then $458, with resistance at the previous peak of $475 marked on September 22.
The $475 level was the highest since January 1988. On Friday, the benchmark December gold contract at the Comex division of the New York Mercantile Exchange settled $3.50 lower at $472.30 an ounce on profit-taking as oil prices slipped and the dollar gained against the euro.
Gold has surged to near 18-year peaks as investors flocked into the bullion market as a hedge against inflation because of soaring oil prices and concerns over how the US economy will weather the financial impact of Hurricane Katrina and Rita.
Oil prices were steady on Monday. US light crude was trading at $66.28 a barrel, after falling on Friday due to slumping US gasoline prices.
The dollar hit a 16-month high against the yen, with Japan's tanked, a leading business sentiment survey, contrasting with expectations for more US interest rate rises.
The dollar was also at its strongest against the euro since July 8. A stronger US dollar makes dollar-priced gold more expensive for holders of other currencies.
Another trader said the firmer dollar also pulled Tokyo futures lower on Monday. The most active August gold contract on the Tokyo Commodity Exchange (TOCOM) was down 12 yen per kg at 1,719.
In other precious metals, silver and platinum followed gold lower, with spot silver easing to $7.41/7.43 from $7.44/7.47. Platinum fell to $921/925 an ounce from $929/933 last quoted in New York.
However, palladium bucked the trend, with prices edging up to $195/199 from $194/197 an ounce.