By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) -- Gold futures posted losses Monday as the dollar strengthened, although prospects of renewed interest from Asian buyers put a floor under gold prices.
Gold for December delivery fell $4.30, or 0.4%, to $1,224.50 an ounce on the Comex division of the New York Mercantile Exchange on light volume. A close around these levels would be gold's lowest in a week.
"There's lack of interest for the moment," said Frank Lesh, a broker and analyst with FuturePath Trading in Chicago, as the week will bring key economic indicators, including economic growth projections and housing indicators.
"The market just seems to be in a bit of a holding pattern right now," he said.
The dollar index (DXY 83.19, +0.13, +0.16%) , which compares the U.S. unit to a basket of six currencies, rose 0.2% to 83.25 after opening lower. A rising dollar usually puts a damper on commodity prices as it makes them more expensive for holders of other currencies.
Gold also 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.
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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 slightly less than 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.
Among other metals, September silver slipped 3 cents, or 0.2%, to $17.96 an ounce. Copper, however, posted slight gains as the increased merger-and-acquisition activity stoked hopes of more consumption.
September copper added a penny, or 0.2%, to $3.30 a pound.
