Gold turned lower early on Monday despite broad metals and commodity gains amid economic optimism, as technical selling put a damper on bullion's initial rise. Silver and platinum group metals, however, climbed on positive economic sentiment amid sharp industrial metal gains, while crude oil jumped nearly $3 to above $81 per barrel and as the euro hit its highest level since early May.
In early sessions, gold rose toward $1,200 an ounce, as rallies in other markets stirred fund buying. Wall Street rallied more than 2 percent on strong corporate earnings. George Nickas, commodities broker at FC Stone, said gold rose in early sessions on hopes of economic recovery, but technical selling were still pressuring prices.
Gold lost about 5 percent in July and was among the top percentage losers in the commodities complex. Analysts said the metal is at risk of falling sharply after breaking below a two-year bullish support channel. Spot gold rose as high as $1,190.40 an ounce and was last at $1,179.95 an ounce at 12:28 pm EDT (1628 GMT), against $1,181.50 late in New York on Friday. US gold futures for December delivery slipped $2.10 to $1,181.80.
Gold managed to arrest a slide that last week took it to a three-month low of $1,156.90 an ounce and then turn higher in its best run since late May. The world's largest bullion exchange-traded fund, the SPDR Gold Trust, reported its biggest outflow in a year last month, with holdings down more than 38 tonnes in July to 1,282.3 tonnes.
The World Gold Council said the International Monetary Fund sold 17.4 tonnes of gold in June as part of a planned program of bullion sales. That leaves 120.2 tonnes of gold still to be sold under the program. Silver was up by over 2 percent at $18.34 an ounce versus $17.96, making this its strongest one-day performance since early June, while its ratio to gold - or how many ounces of silver are needed to buy an ounce of gold - hit its lowest since mid-May at 65.0. Platinum was at $1,592 an ounce against $1,566.55, while palladium was at $510 against $491, having hit its highest since mid-May earlier in the day.