Gold prices rose on Monday as the US dollar slipped after last week's rally though investors are watching for inflation data from the United States later this week for signs of the intensity of expected US interest rate increases.
Spot gold was up 0.6 percent at $1,323.63 per ounce, as of 0722 GMT. Last week, the precious metal fell 1.2 percent for its second consecutive weekly decline. US gold futures for April delivery rose 0.8 percent to $1,325.60 per ounce.
"Gold has picked up a little in the last 24 hours, as a hint of dollar weakness creeps back into markets," said Jordan Eliseo, chief economist at gold trader ABC Bullion. The dollar index, a measure of the greenback against a basket of six major currencies, dropped 0.38 percent to 90.096
Last week the index rose 1.4 percent because of a flight to safer assets amid a rout in global equity markets. A weaker greenback makes dollar-denominated gold less expensive for holders of other currencies.
"The uptick in prices today is not so much safe-haven buying, but more so potential short covering behaviour by market watchers," said OCBC analyst Barnabas Gan. Gold prices slipped 2.5 percent in the prior two weeks before Monday.
Hedge funds and money managers slashed their net-long position in COMEX gold for the first time in eight weeks in the week to February 6, and cut it in silver, US Commodity Futures Trading Commission data showed on Friday. Spot gold is expected to end its current bounce in a resistance zone of $1,325 to $1,330 per ounce and then revisit its February 8 low of $1,306.81, said Reuters technical analyst, Wang Tao.
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