Gold rose above $1,370 an ounce on Monday as the dollar moved into negative territory versus the euro, and as concerns over the outlook for Portugal's sovereign debt lifted the metal's appeal as a haven from risk. Spot gold was bid at $1,370.75 an ounce at 1635 GMT, against $1,368.80 late in New York on Friday. US gold futures for February delivery rose $1.90 an ounce to $1,370.80.
Prices last week posted their biggest one-week fall since May 2010 after a run of better-than-expected US data lifted expectations that monetary policy could tighten sooner rather than later. The return of concerns over the eurozone has tempered that dip, though risks remain. "Overall positive US economic data last week reduces the likelihood of further quantitative easing, thus weighing on gold's safe haven and inflation hedge appeal," said BNP Paribas analyst Anne-Laure Tremblay.
A senior eurozone source said on Sunday pressure is growing on Portugal from Germany, France and other eurozone countries to seek financial help from the European Union and International Monetary Fund to stop the bloc's debt crisis from spreading. The euro reached a four-month low against the dollar, although it later recovered to trade 0.2 percent higher.
Buying in India, the world's biggest gold consumer, rose on Monday after last week's price fall attracted buyers back to the market, and traders stocked up ahead of the upcoming harvest festival and on wedding demand, dealers said. But interest in gold-backed exchange-traded funds continued to be lacklustre, with holdings of the largest, New York's SPDR Gold Trust, dropping by a further 1.5 tonnes on Friday.
Societe Generale said in a weekly note that buying by exchange-traded funds had been markedly slower as prices rose above $1,400 an ounce. "This, of course, does not necessarily mean that investor appetite has become sated," it said. Holdings of the largest silver ETF, the iShares Silver Trust, also fell more than 53 tonnes on Friday. Spot silver was at $28.98 an ounce against $28.69. Platinum was at $1,744.50 an ounce against $1,731, while palladium was at $751.72 against $748.50.