Gold rose above $1,360 an ounce on Monday as the dollar's retreat from highs versus the euro took some pressure off prices, with a second consecutive weekly price rise underpinning investors' confidence in the metal. Comments from European Central Bank Governing Council member Ewald Nowotny that the ECB was not turning soft on inflation also gave prices a fillip, as it suggests that price pressures remain in focus. Inflation can benefit gold.
Spot gold was bid at $1,363.15 an ounce at 1608 GMT, against $1,356.12 late in New York on Friday. US gold futures for April delivery rose $3.10 an ounce to $1,363.50. Prices remain caught between support near $1,320 an ounce and resistance towards $1,370 as investors wait to see whether the appetite for risk that boosted higher yielding assets at gold's expense at the start of the year will be sustained.
"While the market's positive outlook on gold has moderated since the beginning of 2011, we expect the metal's price to remain supported by a range of factors," said Anne-Laure Tremblay, an analyst at BNP Paribas. Demand for gold-backed exchange-traded funds also remained soft, with holdings of the world's largest, New York's SPDR Gold Trust, falling by 55 tonnes so far this year.
Elsewhere silver rose to its highest in nearly six weeks at $30.71 an ounce. The tightest physical silver supplies in four years tipped the US silver futures market into backwardation last week, making near-term prices more expensive than more distant months.
Silver was later bid at $30.56 an ounce against $29.85. Platinum was at $1,824.92 an ounce against $1,802.50, while palladium was at $829.72 versus $811.
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