Gold rebounded on Monday, hovering not far from a 2-month high around $636 an ounce hit last week after the US dollar dropped against other currencies and selling in Japanese futures subsided. Spot gold rose to $631.70/632.60 an ounce from $627.00/628.00 an ounce late in New York and London's afternoon fix at $629.30 an ounce.
Gold rallied to $636.50 on Friday on the back of a falling dollar and speculation China could buy the yellow metal, but profit taking erased much of the gains. It ended more than $6 an ounce lower in the US market. "If the dollar dips again and again, it will be pretty good for gold," said commodities analyst Tobin Gorey of Commonwealth Bank of Australia.
Gold would find resistance at $636 and $637 an ounce, said Gorey, adding that more weakness in the dollar could help the metal rise further to $640 a high last seen in September. The euro edged up to $1.2855 from around $1.2840 late in New York on Friday, when it rose to its highest since August 21 around $1.2900. The dollar eased to 117.40 yen from around 117.60 yen. The dollar was under pressure on worries that central banks might gradually shift their foreign exchange reserves away from the currency after People's Bank of China Governor Zhou Xiaochuan reiterated that Beijing planned to diversify its estimated $1 trillion in reserves.
Benchmark gold futures on the Tokyo Commodity Exchange fell to as low as 2,398 yen per gram and was quoted at 2,409 yen, still nine yen lower than on Friday's close.
Silver rose to $13.01/13.08 an ounce from $12.99/13.06 late in New York but off on Friday's two-month high of $13.14 an ounce. Platinum rose to $1,210/1,215 an ounce from $1,206/1,212 late in New York. The metal had rallied to a two-month high of $1,227 last week. Palladium eased to $328/333 an ounce from $330/335.