Gold ends steady in Asia

Gold was steady on Monday as dollar strength that drove bullion 1.7 percent lower in the previous session, its biggest loss since early February, weighed on the market. The dollar was steady versus the euro on Monday, having jumped on Friday on speculation that debt-laden Greece may have to turn to the International Monetary Fund for help, rather than its euro-zone neighbours, sending commodities sharply lower.
"Gold was hit pretty hard on Friday as the US dollar strengthened. It depends on where the dollar goes and at the moment it is looking a bit bullish," said Peter McGuire, managing director of CWA Global Markets in Sydney. "The market is very slow at the moment I don't see much happening until we get a clear idea on what is happening with the US dollar.
But it is not unusual to see it strengthen around Easter." Spot gold fell 30 cents to $1,106.25 an ounce by 0710 GMT, trading just below its 30-day moving average. US gold futures for April delivery on the COMEX division of the NYMEX stood at $1,106.6 versus $1,107.60 at Friday's close.
"Gold remains driven by the perceived strength of the dollar," Tim Barker, resources analyst at BT Financial Group, said. But he added that although gold had fallen sharply, it had held up comparatively well given the extent of dollar gains.
Since September 2008, gold prices have rallied 25 percent, while the euro has lost some 7 percent versus the dollar. Barker added: "It will be interesting to see what happens to gold when currencies stabilise. "The focus seems to be on other commodities - the bulks in particular are strong and that is where investor focus lies."
Markets were subdued with Japanese investors out for a national holiday. An increase in benchmark rates by India's central bank on Friday to tame inflation has also worked to keep gold prices in check. India is the world's largest buyer of gold. The Reserve Bank of India increased the repo rate, the rate at which it lends to banks, to 5.00 percent and the reverse repo rate, the rate which it absorbs funds from the system, to 3.50 percent with immediate effect. "The increase in Indian interest rates has weighed on gold," David Moore, commodities strategist, Commonwealth Bank.
"We have spent quite a bit of time in the $1,100-$1,130 range recently. We are towards the bottom of that. My inclination is that the gold price will end the year lower, but it may spike higher supported by safe haven buying given the fiscal situation in certain countries."