By: Reuters
U.S. Federal Reserve Chairman Ben Bernanke on Friday stopped short of detailing further action to boost the economy but said the central bank would consider what more it could do to fight high unemployment.
"The market didn't really get much insight as to what the Fed may or may not do," said Darren Heathcote, head of trading at Investec Australia.
"It is an opportunity to take some profit off the table after the run-up, given that we are not going to get anything from the Fed for a while."
Spot gold [XAU= 1821.51
-6.99 (-0.38%) 
] fell as much as 1.2 percent to $1,806.29 an ounce, before recovering slightly to $1,815.59 by 0249 GMT. Prices lost more than 1 percent last week, snapping seven straight weeks of gains.
U.S. gold [GCCV1 1824.60
27.30 (+1.52%) ] gained 1.2 percent to $1,819.
Technical analysis suggested that spot gold could rise to $1,838.29 on Monday, said Reuters market analyst Wang Tao.
Spot gold fell more than 1 percent on Monday, reversing a 3.2-percent rally in the previous session, as investors faced with uncertainties on the U.S. Federal Reserve's stimulus plans decided to take some money off the table.
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Jose Luis Pelaez | Iconica | Getty Images |
"The market didn't really get much insight as to what the Fed may or may not do," said Darren Heathcote, head of trading at Investec Australia.
"It is an opportunity to take some profit off the table after the run-up, given that we are not going to get anything from the Fed for a while."
Spot gold [XAU= 1821.51
-6.99 (-0.38%) ] fell as much as 1.2 percent to $1,806.29 an ounce, before recovering slightly to $1,815.59 by 0249 GMT. Prices lost more than 1 percent last week, snapping seven straight weeks of gains. U.S. gold [GCCV1 1824.60
27.30 (+1.52%) ] gained 1.2 percent to $1,819. Technical analysis suggested that spot gold could rise to $1,838.29 on Monday, said Reuters market analyst Wang Tao.
Speculators cut their longs in U.S. gold futures and options last week for a third straight week even as bullion prices shot up above $1,900, the data from the U.S. Commodity Futures Trading Commission showed.
Echoing the cut in longs in futures and options, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 177.47 5.11 (+2.96%) ], recorded an outflow of nearly 60 metric tons last week.
"There was profit-taking around $1,830 level, and people are still watching the dollar, U.S. data and the euro zone's debt issue," said a gold dealer in Hong Kong, adding that many physical market participants have retreated to the sidelines waiting for a clear direction in an unusually choppy market.
Echoing the cut in longs in futures and options, holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust [GLD 177.47
5.11 (+2.96%) ], recorded an outflow of nearly 60 metric tons last week. "There was profit-taking around $1,830 level, and people are still watching the dollar, U.S. data and the euro zone's debt issue," said a gold dealer in Hong Kong, adding that many physical market participants have retreated to the sidelines waiting for a clear direction in an unusually choppy market.
The U.S. dollar was under pressure against a basket of major currencies in Asia on Monday, with traders expecting the Federal Reserve to offer more stimulus next month in the face of an uncertain growth outlook.
Market participants are eyeing data due later in the day including U.S. personal income and consumption, Mid-west manufacturing and pending home sales, for clues on the status of the world's largest economy.
"Investors will remain nervous and gold is likely a beneficiary as a result," said Investec's Heathcote, "I can't see it falling much below $1,700 if at all, with a likelihood of pushing higher in the days ahead if we don't get any good news."
Market participants are eyeing data due later in the day including U.S. personal income and consumption, Mid-west manufacturing and pending home sales, for clues on the status of the world's largest economy.
"Investors will remain nervous and gold is likely a beneficiary as a result," said Investec's Heathcote, "I can't see it falling much below $1,700 if at all, with a likelihood of pushing higher in the days ahead if we don't get any good news."
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