Gold dipped in Europe on Monday as hopes the hopes economic downturn may be bottoming out dented interest in bullion as a haven, and as the dollar firmed. Spot gold was bid at $911.65 an ounce at 9:30 a.m. EDT, against $916.05 an ounce late in New York on Friday. U.S. gold futures for June delivery on the COMEX division of the New York Mercantile Exchange fell $2.70 to $912.20 an ounce. While buying of products like gold-backed exchange-traded funds as a hedge against economic uncertainty drove prices higher earlier in the year, hopes there may be light at the end of the tunnel for the economy undermined those gains. "Investment demand has almost staggered after gold entered into a trading range of $864-$930 over the last two months," said Pradeep Unni, analyst at Richcomm Global Services. "Record holdings... of gold by the gold-backed ETFs are higher than the reserves of many nations, including those of China, and is also nearly half of yearly mine production." "If equity markets extend gains and the financial markets show further semblance of stability, this hoarded gold can return back to markets any time," he said. European shares were lower by midday, but Asian shares rose to their highest in seven months as traders focused on the message of U.S. payrolls data released on Friday, which showed the economy shed fewer jobs than expected. China added to positive news on Monday, as deputy Central Bank governor Su Ning told a conference the government's stimulus had worked better than expected.

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