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imageLONDON: Gold extended earlier gains on Monday, partially recovering from the previous session's slide, as the dollar fell after data showed U.S manufacturing activity contracted last month.

US economic data will continue to remain in focus this week - the non-farm payroll figures will be released on Friday - as this will provide more clues over how long US stimulus measures will remain in place in the approach to the Federal Reserve's next policy meeting later in June.

The US central bank has said it will keep up its stimulus campaign until economic indicators show continued strengthening.

Gold fell more than 6 percent in May largely due to concerns the US Federal Reserve could slow its monthly bond purchases as the US economy showed signs of improvement. But a flurry of disappointing data, including Friday's report on a decline in US consumer spending, has weakened arguments for curbing the scheme.

Spot gold rose to a session high of $1,406.50 an ounce and was up 1.2 percent at $1,402.96 by 1430 GMT. It fell 1.9 percent on Friday, the steepest single-day fall since May 17, which helped push the metal to a second straight monthly decline.

"The $1,400 level will be the peg in the ground for gold ...and I would see prices hovering around it in the run-up to the U.S labour report on Friday," Standard Bank analyst Walter de Wet said.

US gold futures for August delivery rose 0.7 percent to $1,402.90 an ounce.

The dollar index fell 0.5 percent after the ISM data.

Gold was also supported by data showing hedge funds and money managers increased their bullish bets in futures and options for the first time in four weeks in the week to May 28, a report by the Commodity Futures Trading Commission showed on Friday.

"With net gold length now at its lowest ebb for almost a decade, one could argue that the pace of liquidation is likely to slow," Deutsche Bank said in a note.

Declines in the holdings of SPDR Gold Trust, the largest gold-backed exchange traded fund, have stopped after nearly three weeks. Holdings rose last Wednesday and have been unchanged since.

Gold imports in India reached 162 tonnes in May, while Turkish imports fell 4.4 percent to 43.5 tonnes last month.

Silver rose 1.5 percent to $22.54 an ounce. Platinum jumped 2.3 percent to $1,488.49 an ounce, while palladium rose 0.3 percent at $750.50 an ounce after news of a mine shooting in South Africa.

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