Gold fell on Monday as a sharp drop in the euro and losses in commodities triggered profit-taking after the metal's recent rally, but a positive technical outlook could underpin bullion in the near term. The metal was dragged lower by a broad decline in equities, crude oil and grain prices after Greece's efforts to reach a debt restructuring with creditors stalled and European leaders tried to find ways to reconcile economic austerity with growth.
Gold notched a 5 percent gain last week for its fourth consecutive weekly gain after the US Federal Reserve said it was unlikely to raise interest rates from near zero until at least late 2014. The market's technical picture improved after gold broke above key resistance at its 200-day and 100-day moving averages, analysts said. Spot gold was down 0.4 percent at $1,730.36 an ounce by 2:47 pm EST (1947 GMT), off an intraday low of $1,716.19. It was on track gain 10 percent in January, which would be its strongest monthly rise since August's 12 percent rally.
US gold futures for February delivery settled down $1.20 at $1,731 an ounce. Trading volume was in line with its 30-day average. Platinum was down 0.4 percent on the day at $1,609.24 an ounce and has risen by nearly 15 percent in January, the biggest rise since the 25 percent rally of February 2008. Palladium edged up 15 cents to $685.75 an ounce.
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