Gold hits 1-week low on dollar, flirts with $1,000

By Lewa Pardomuan

SINGAPORE (Reuters) - Gold slipped below $1,000 an ounce for the first time in almost a week on Monday after failing to revisit last year's record, with sluggish offtake from jewellers across Asia stepping up the selling pressure.

Gold hit $1,023.85 on Thursday, its strongest since March 2008 when it struck a record of $1,030.80, on uncertainties over the sustainability of the global economic recovery, but the dollar's rebound from a 1-year low eventually spurred selling.

Spot gold was quoted at $1,000.30 an ounce by 0505 GMT, down $5.85 from New York's notional close on Friday. Bullion, which gained as much as 16 percent this year, fell to an intraday low of $999.05 an ounce on Monday.

"I think investors are probably a bit cautious. We've got here, where does it go next? Some people might sort of view now the upside from here has been more limited," said David Moore, commodities strategist at Commonwealth Bank of Australia.

"I am a bit of a bear on gold. I think gold would go back under $1,000. I think the physical demand for gold is still very weak. When investors start to look elsewhere, I think the gold price will fall back."

Trading was muted, with Japanese markets closed for a long holiday but dealers noted selling from speculators in other parts of Asia, driven by worries over the IMF's plan to sell gold and a firmer dollar.

The physical market in Singapore was closed for a Muslim holiday and purchases from jewellers in another bullion trading centre, Hong Kong, were scarce although gold has dropped more than 2 percent since hitting last week's multi-month highs.

The U.S. dollar gained against the euro in thin trade on Monday, extending a rebound late last week on short covering ahead of a Federal Reserve policy meet on interest rates and a Group of 20 summit.

Posted in: Business-Economic,World News