TOKYO (Reuters) - Gold rose on Monday after falling for five straight sessions, with investors attracted by the precious metal in the face of remaining uncertainty over the global economy.
Last week spot gold fell 4.6 percent in its biggest weekly percentage loss in almost 15 months. But a loss of more than $50 during the period was seen as a short-term correction after the metal hit a record high of $1,248.95 an ounce on May 14.
Long-term investors maintained their affinity for the precious metal despite the recent rise in volatility in other markets, including stocks, analysts said.
"Gold edged up as unwinding of longs by short-term investors was petering out. It's been a minor correction and a normal one," said Kaname Gokon, deputy general manager at a commodity brokerage Okato Shoji Co's research section.
"There's been no change in long positions by long-term investors," he said.
Financial markets are still wary over the debt crisis in Greece, maintaining gold's allure as a safe haven, said Tatsufumi Okoshi, a senior economist at Nomura Securities Co.
Spot gold rose more than 1 percent to $1,188.60 an ounce as of 0511 GMT from $1,175.15 late in New York on Friday when it fell to a two-week low of $1,166.50.
Technically, gold could rally to $1,193.60, provided a minor support point at $1,175.00 holds firm.
Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, said the market was "cautiously bullish" on gold due to views thaT the problems in the euro zone would not be resolved in the short term.
But investors were also cautious about the risk of global economic downturn dampening purchases of bullion.
"There is scaled-down buying, with people watching the euro/dollar and developments in the euro zone," Leung said, adding that gold's firm support was seen around $1,165-$1,170.
In the currency market, the euro slipped on Monday as investors sold into its latest bounce and worries about the health of the European banking sector weighed on the single currency.
U.S. gold futures for June delivery were at $1,187.30 an ounce, up nearly 1 percent from Friday's settlement.
Net long noncommercial U.S. gold futures positions fell to 231,670 contracts in the week ended May 18, down 1.8 percent from a week earlier, the Commodity Futures Trading Commission said in a weekly report.
Underlining investor confidence over gold, holdings by the world's largest gold-backed exchange-traded fund stayed unchanged for the third session in a row.
The SPDR Gold Trust said its holdings totalled 1,220.152 tonnes as of May 21, unchanged from the record high marked on May 19.
Spot platinum was at $1,515.25 an ounce, up 0.7 percent from $1,504.50 late on Friday. That day it fell as low as $1,452.50, its lowest since February 5, before paring losses.
Spot palladium was at $440.50 an ounce against $433.50 on Friday, when it bounced back after falling as low as $393, also its lowest since February 5.
Last week platinum and palladium ran their biggest weekly percentage losses since late 2008, hit hard by fund liquidation on fears the euro zone's debt crisis will crimp global growth.
"The damage to platinum and palladium was far more serious than that to gold," Okato Shoji's Gokon said.
If and when the two metals' prices fall to or below their January levels it could trigger a rush of selling by U.S. platinum and palladium exchange traded funds, Gokon said.
ETF Securities Ltd's U.S. physical platinum and physical palladium shares ETFs had drawn strong inflows of money amid a rosy outlook for the auto sector since the funds' inception in January.
