Gold rose above $1,050 an ounce on Monday, wiping out most of the previous week's losses, as dollar weakness made bullion cheaper for holders of other currencies. Skip related content
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Spot gold rose to $1,052.55 an ounce at 12:50 p.m., compared with New York's notional close of $1,044.40, nearly erasing its 1-percent loss from the week before.
"It's always a dollar story," Afshin Nabavi, head of trading at MKS Finance in Geneva, said of the gold price's recent correlation with the U.S. currency.
He added that bullion was currently meeting resistance at $1,060, and "if the dollar continues to come under pressure then we will see that (resistance) taken away."
The dollar drifted lower against a basket of major currencies and the euro bid at $1.4769.
Last week gold registered its first weekly loss since the week of September 25, after dollar weakness had helped spur four consecutive weeks of gains.
"For the next six months we're going to see quite a bit more dollar weakness," Standard Bank analyst Walter De Wet said.
"On a relative basis the U.S. interest rates remain very low. Also, the Fed has been a lot more aggressive on quantitative easing than any other central bank, which is not good for dollar strength."
U.S. gold futures for December delivery stood at $1,053.2 an ounce, up $12.8 from Friday when the contract fell $6.70 to $1,040.40 on the COMEX division of the New York Mercantile Exchange.
Among data due on Monday, investors will eye U.S. ISM and pending homes sales data, both due at 3 p.m..
ANGLOGOLD ASHANTI
AngloGold Ashanti , the world's No.3 gold producer, lowered its annual production target for the second straight quarter after suspending output at a South African mine for safety checks.
Other African miner Randgold Resources and AngloGold Ashanti said they agreed to buy an additional 20 percent in the Moto gold project in the mineral-rich Democratic Republic of Congo for about $113.6 million.
The world' largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell 0.915 tonnes on Friday, making the total weekly decline to 4.575 tonnes.
Analysts said physical buying of gold was holding up, supporting bullion prices.
"On the downside it seems well protected," Standard Bank's Walter de Wet said. "We're seeing good physical buying. When gold goes below $1,040 there's some good interest which is supporting the price."
Silver traded at $16.54 from $16.27. Platinum was at $1,332 from $1,322.5 and palladium was at $322.50 from $318.5.
(Editing by Sue Thomas)
