Gold prices were trading higher on Monday on buying interest from Asia and as the dollar retreated, but held around the $1,200 threshold as the stronger equities that dulled the metal’s safe-haven appeal.
Strength on oil prices has also supported bullion, but the earnings in gold could be difficult to sustain because of the concerns of higher interest rates in the US and a strong prospect for the dollar.
On the Comex, US gold futures for February delivery was rose 0.34% to $ 1200.10.
Spot gold had edged up 0.4 percent to $ 1,199.86 an ounce, after losing 2 percent last week.
The greenback remained supported after the Federal Reserve noted last week it was on track to raise interest rates next year, but said he was taking a patient approach.
Support was also an increase in oil prices, which were fueled by expectations of Brent crude will probably to remain above $ 60 for the rest of the year.
Investors feared that petroleum prices could drive the demand for gold, seen as a hedge against inflation led by oil.
Gold has some early support of buying in top consumer of gold China, where local prices were at a premium of about $ 3 an ounce in world benchmark, although they slipped later in the session to close $1.
It is expected that trading volumes to stay light this week with many investors away for the Christmas holidays and ahead of New Year holidays.
“The effect of the decline in the international market is being witnessed in the domestic market. With the decline of 0.15 per cent on MCX gold is trading below Rs 27,000.” 100McxTips Analysts said.
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