Gold edged down in choppy trade on Monday, after posting its biggest gains in eight weeks in the previous session on the political unrest in Egypt, but buying interest in the physical market offered support and offset worries about declines in ETF holdings. Silver was at a 1-week high, tracking gold's earlier gains.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings slipped to 1,224.118 tonnes by January 28, its lowest since May of last year. Spot gold fell $1.05 to $1,337.25 an ounce by 0724 GMT, having earlier risen to around $1,345. Gold dropped to as low as $1,308 on Friday, its weakest since early October 2010, before reversing losses on safe haven buying related to the chaos in Egypt. US gold futures for February fell $3.4 an ounce to $1,337.30 an ounce, having ended up nearly 2 percent on Friday.
In the physical sector, premiums for gold bars were at their strongest level since at least 2004 on tight supply, short covering before the festive season in India and China as well as physical buying driven by the deadly protests in Egypt.
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