Gold held tight near a six-week high on Monday as fears of rising prices kept up the metal's allure as a hedge against inflation, though investment in gold-backed exchange-traded funds halted after a recent gain.
Gold was little changed at $US930.00 in Asian trade, compared with New York's notional close of $US930.70 on Friday, when prices climbed to their highest level in six weeks after data showed U.S. core inflation in April rose more than expected.
US gold futures for June delivery were at $US930.70 per ounce, compared with $US931.30 an ounce on the Comex division of the New York Mercantile Exchange on Friday.
"Gold is inching up a bit because of inflation worries, of (governments) printing money, with investors switching to gold,'' said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong.
"The market is quiet and expected to stay so as players wait for the housing data to see if stability is returning, and how stock markets react,'' he said.
The US National Association of Home Builders releases its May housing market index overnight.
US economic data on Friday offered some evidence that the recession's worst phase may be over, with April consumer price unchanged and industrial output declining at a slower pace than in March.
While the headline inflation figure was flat, and economists widely expect negative readings later this year, core prices, which exclude food and energy items, rose 0.3 per cent after gaining 0.2 per cent in March.
The Federal Reserve has pumped more than $US1 trillion into the economy to prevent its downward spiral.
While the US dollar has recovered against a basket of currencies, the US currency's recent weakness has maintained support for bullion, Leung said.
Gold often moves in the opposite direction to the US dollar. A fall in the dollar makes it less expensive for holders of other currencies to buy the metal.
The dollar and yen rose on Monday as worries persisted about global economic prospects, triggering stock losses and prompting investors to seek shelter in the yen in particular.
Investors were not in a hurry to invest more money into gold, keeping holdings at the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, unchanged at 1105.62 tonnes as of May 15.
