By Eric Onstad
LONDON (Reuters) - The price of gold rose on Monday, partly lifted by steady flows into exchange-traded funds (ETFs) and a dip in the dollar after touching seven-month highs.
U.S. gold futures
"Supporting the price are moderate but continuous ETF inflows since the beginning of the month. The rise so far this month is more than for all of last month," said Commerzbank analyst Daniel Briesemann in Frankfurt.
Holdings of the largest gold-backed ETF, New York's SPDR Gold Trust
Total EFT gold holdings have gained 679,335 ounces so far this month to 57.35 million ounces, according to Reuters data
Also supporting the price was a retreat in the dollar from a seven-month peak touched earlier on Monday. The dollar index <.DXY> was down 0.1 percent at 97.956 after hitting a high of 98.169.
Spot gold, which has shed about 7 percent over the past three weeks, is expected to stabilise after many speculators ditched long positions, Briesemann added.
"Long contracts have been reduced by more than 100,000 contracts over the past two weeks, so we believe many of the shaky hands have already left the market," he said, adding that he forecasts a year-end price of $1,350 an ounce.
Physical buying of gold might pick up ahead of the festival and wedding season in India and ahead of the new year in China, he added.
Demand for gold from top consumer China will remain strong at around 900 to 1,000 tonnes next year, near 2015 levels, although a weaker appetite for jewellery and slowing economy could curb purchases, a World Gold Council official told Reuters.
"Though there is not much activity, the metal (gold) is finding good interest in small amounts in China at this price," a trader with a China-based bank said.
Investec analyst Hunter Hillcoat said in a note that platinum prices should rise in the short-term along with gold due to a flight to safety.
"The fundamentals of both platinum and palladium markets are, however, not indicating a rapid or strong enough recovery in price during our medium-term forecast period, especially while off-market stocks can be mobilised to cover the modest market deficits we expect," he said.
(Additional reporting by Nallur Sethuraman and Apeksha Nair in Bengaluru; Editing by William Hardy)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)