Gold prices rose slightly on Monday as the US dollar pared gains and bargain hunters used dips to accumulate the precious metal. Spot gold rose as much as 0.5 percent to $1,256.11, and was up 0.4 percent at $1,254.60 an ounce at 0729 GMT. The yellow metal fell nearly 0.6 percent on Friday to a low of $1,247.01, its lowest since October 7. US gold futures were flat at $1,255.60 an ounce.
"Because the possibility of a December rate hike is increasing, generally, the trend of gold price is downwards but in the short term we think that there could be relatively a mild technical correction," said Jiang Shu, chief analyst at Shandong Gold Group. Shu expects prices to touch $1,270 in the short term before a sharp selloff on expectations of a rate hike. "There's still a period of time before the rate hike." US producer prices rose in September to post their biggest year-on-year rise since December 2014, while retail sales gained 0.6 percent after a 0.2-percent decline in August.
"Though there is not much activity, the metal (gold) is finding good interest in small amounts in China at this price," a trader with a China-based bank said. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.40 percent to 965.43 tonnes on Friday.
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