Monday, bullion prices recovered to hover around $1,080 after posting a third straight week of declines as investors remained wary of gains in the dollar which weaken bullion's appeal as a currency hedge.

Spot gold was little changed at $1,078.60 per ounce as of 2:42 GMT compared to New York's notional close of $1,079.20.

Last Thursday spot gold marked a low of $1,073.75, its weakest level since November, 3, hit by a stronger dollar and uncertainty over how President Barack Obama's proposal to limit risk taking by US banks could impact gold trading.

A US proposal to limit bank risks continued to weigh on investor sentiment.

Gold seems to be vulnerable, but a healthy appetite from physical buyers was seen likely to keep support solid around $1,074 an ounce.

A stronger dollar makes commodities denominated in the currency more expensive for holders of other currencies.

As expectations for higher interest rates were likely to grow later in 2010, the dollar's strength could become more prominent and weigh on gold in the second half of the year, according to some experts.

US gold futures for April delivery weakened by 0.4% to $1,079.30, compared to $1,083.80 an ounce on the COMEX division of NYMEX.


With prices falling, noncommercial net long US gold futures positions fell by 4.3% to 211,924 lots in the week to January, 26 from 221,469 lots, a weekly report by the US Commodity FuturesTrading Commission showed. It reflected the largest drop since a 7% decline in the week to December, 22, and down nearly 20 percent from the peak of 262,331 lots in the week of November, 24.

investment into gold has stalled, with holdings at the SPDR Gold Trust, staying flat at 1,111.922 tonnes as of January, 29.

Around 02:44 GMT the precious metals was quoted as much as:

Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1078.90 -0.30 -0.03 -1.53
Spot Silver 16.14 -0.02 -0.12 -4.10
Spot Platinum 1509.00 9.00 +0.60 2.86
Spot Palladium 414.25 1.25 +0.30 2.16
TOCOM Gold 3135.00 3.00 +0.10 -3.80 42692
TOCOM Platinum 4368.00 28.00 +0.65 -0.30 9985
TOCOM Silver 47.40 0.20 +0.42 -8.32 359
TOCOM Palladium 1199.00 1.00 +0.08 2.92 127


TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices are in $ per ounce.