Gold jumped to a seven-week high above $610 an ounce on Monday as a break of key resistance around $607/$608 triggered fresh buying after an earlier boost from a weaker dollar, traders said. Spot gold was quoted at $607.60/$608.60 an ounce by 1545 GMT, compared with $598.20/$599.70 late in New York on Friday.
Earlier on Monday it hit a session peak of $610.50, the highest since September 8. "There was some technical buying that pushed it up ... But that was followed by a large sell order and it is struggling to stay up now," a trader said. "The dollar has recovered a little, but it is still weak and that helps gold."
Unexpectedly soft economic growth data from the United States has weighed on the dollar since Friday. The weaker dollar prompted investors to pile into gold, seen as a safe haven against economic turmoil.
US gross domestic product grew at an annualised 1.6 percent in the third quarter, the lowest rate since the first quarter of 2003, compared with a consensus forecast of 2.2 percent and 2.6 percent in the second quarter.
"The dollar has taken a bit of a tumble and that in turn has boosted gold, said James Moore, analyst at TheBullionDesk.com.
"It's a potentially difficult situation, where the US may be looking at stagflation."
Investors also use gold as a hedge against inflation.
Crude oil prices fell below $60 a barrel on doubts about Opec's resolve to cut production. Lower oil prices would normally turn sentiment against gold.
"Oil is a negative, but hasn't really had much impact," the trader said. "The market isn't really sure about Opec's cuts."
But analysts say oil supply concerns could dominate gold prices with the northern hemisphere winter season approaching.
"Opec production data/decisions and US inventories should remain pivotal market drivers," Heraeus said in a research note.
Gold reversed its downtrend last week on news of a large drop in US crude stockpiles, which sent oil prices soaring back above $60 a barrel.
Falling demand from the physical gold market with the passing of the Indian festival season is another factor that has, perhaps briefly, been sidelined.
News that Dubai's gold imports fell 9 percent in the third quarter to 117.6 tonnes against the same period last year was shrugged off by traders focussing on the dollar.
However, the metal faces further technical barriers on the upside. The first is around $623, where the 10-day moving average cuts in, followed by $630, where the 30- and 50-day moving averages could limit the upside.
Silver, which has been tracking gold, faces first resistance at $12.30 an ounce.
It was last quoted at $12.11/$12.18 an ounce, below the seven-week high of $12.24 seen earlier in the session and compared with $12.02/$12.09 late in New York on Friday.
Platinum rose to $1,086/$1,091 from $1,071/1,076 late in New York. Earlier on Monday it hit $1,090 an ounce, the highest since October 20. Palladium gained to $324/$329 an ounce from $316/321.