Gold prices rose in Asian trade on Monday, snapping a 3-session losing streak, buoyed by physical buying after the metal slid to a 5-1/2-month low on Friday. Spot gold was up 0.42 percent at $1,213.31 an ounce by 0655 GMT. In the previous session, the metal fell as much as 1 percent to mark its lowest since May 30 at $1,203.52. US gold futures were up 0.4 percent at $1,213.30 per ounce.
"The low prices have induced some interest in the physical market," said ANZ analyst Daniel Hynes. "However, the dollar has got some momentum behind it and until a turnaround, it is going to be difficult for gold prices to recover." The dollar held near 13 1/2-year highs against a currency basket on Monday, on continued bets of faster inflation and higher interest rates.
Bullion has fallen 5.4 percent this month as of Friday's close, pressured by nerves around the US election and speculation over the timing of an interest rate hike by the Federal Reserve. "There are chances for prices to weaken below $1,200 in the next few weeks leading into the Federal Open Market Committee (FOMC) meeting," Hynes added. Spot gold seems to have found a support at $1,204 per ounce, it may hover above this level for one day or bounce moderately into a range of $1,222-$1,235, according to Reuters technicals analyst Wang Tao.
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