By Claudia Assis, MarketWatch SAN FRANCISCO (MarketWatch) -- Gold futures posted a small loss Monday as a fresh batch of merger activity sweetened investor sentiment toward stocks and oil, though prospects of renewed interest from Asian buyers put a floor under gold prices. Gold for December delivery declined $1.20, or 0.1%, to $1,227.60 an ounce on the Comex division of the New York Mercantile Exchange. Gold declined Friday as the dollar rose, but managed to post a weekly gain of 1% as investors remained concerned about the pace of the global economic recovery and sought gold to protect their wealth. Besides the still-present interest from these investors, "gold is also likely to remain well supported by physical demand in the weeks ahead," analysts at Commerzbank said in a note to clients Monday. Tuesday marks the start of the festival season in India with the Raksha Bandhan, "in which gold is traditionally given as gifts. This lasts until October and should also be reflected in rising gold imports," the analysts said. Meanwhile, central-bank buying also lent support to gold prices. Russia increased its gold reserves by more than 15 tons in July to just under 725 tons according to its central bank, the analysts said. "Although the rise in holdings is likely to have come from the country's own production, this absent supply will contribute to a tighter gold market," they added. The dollar index (DXY 82.89, -0.17, -0.20%) , which compares the U.S. unit to a basket of six currencies, was 0.1% lower at 82.94.

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