Gold gave up early gains on Monday despite a rebound in the euro against the US dollar, lacking impetus to surpass recent peaks and sustain an uptrend fuelled largely by a debt crisis in Europe. The physical market was deserted as jewellers were unsure about direction after bullion fell almost 1 percent on Friday for its biggest one-day decline in a month, squeezed by a rally in the dollar and declines in other commodities.
Spot gold fell $1.13 to $1,529.90 an ounce by 0620 GMT after rising as high as $1,532.56 an ounce, still well below a lifetime high around $1,575 struck in May. Newmont Mining Corp, the world's No 2 gold producer, sees prices for the precious metal rising to $1,600 this year and above that next year, on growing demand from Asia's burgeoning middle class.
"I think it is still looking for sufficient momentum and a catalyst that's needed for it to break the $1,550 level on a sustained basis," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore. Support for gold was seen at its 20-day moving average of $1,524, a level it has held for the past three weeks.
The bullion market in top consumer India was also slow as the monsoon progresses. The monsoon period is a seasonally slack one for gold demand and jewellers are expected to replenish stocks ahead of September, when festivals and weddings restart. US gold edged up $2.3 to $1,530.90 an ounce.
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