NEW YORK/LONDON: Gold prices edged up on Monday on a better technical outlook to improve on last week's gains, but the precious metal finished slightly lower for April.

Bullion dropped about 0.2 percent in April, its third consecutive monthly decline and longest monthly losing streak since 2000. A strong run of US data and fading hopes of more monetary easing by the Federal Reserve have dented investment interest in the metal.

After suddenly falling 1 percent in heavy volume earlier in the session, bullion gradually erased those initial losses to turn higher. Analysts said the metal's ability to hold above key support and to post a weekly gain last week triggered technical buying.

"Gold posted a bullish outside week last week, adding further fuel to our belief that a base is being formed for the next rally higher," Tom Fitzpatrick, a strategist at Citigroup's technical research unit CitiFX.

Fitzpatrick said that gold's next target could be its February high at $1,790 an ounce, but its rise in the near term may be a gradual grind instead of an imminent acceleration.

Spot gold inched up 0.1 percent to $1,663.90 an ounce by 2:16 p.m. EDT (1406 GMT).

US gold futures for June delivery settled down 60 cents an ounce at $1,664. Monday's volume was below average, preliminary Reuters data showed, consistent with the metal's recent trend.

Early in the US session, the June contract had tumbled as much as $12 within a minute in one sell-order involving nearly 8,000 lots. The anomaly and its swift recovery has prompted some traders to speculate that the trade was entered erroneously.