LONDON: Gold prices slipped on Monday as confidence crumbled in the face of a higher dollar, lower oil prices and receding inflationary worries.
However, analysts said that over the longer term, a substantial depreciation of the dollar will help boost the precious metal.
A weaker US currency makes gold priced in dollars cheaper for holders of other currencies. Spot gold was down at $736.10/737.60 an ounce at 1337 GMT compared with $741.05 an ounce late in New York on Friday.
Earlier, it touched a session high of $847.15 on strong buying interest from jewellery makers. The dollar slipped on Monday, but it is higher than in July when it hit record lows against the euro beyond $1.60.
"We are quite bullish for gold in the long term, primarily because we see the dollar weakening substantially on all this liquidity being pumped into the system," said Dan Smith, analyst at Standard Chartered.
To ease the credit crunch and financial crisis, central banks around the world have slashed interest rates and made available large amounts of cash to the banking sector.
