Gold stayed above $1,000 an ounce on Monday as the dollar remained pressured after last week's jobs data pushed the currency down broadly on concerns the U.S. economic recovery may not be as robust as previously thought.
Traders remained wary of a sudden liquidation of speculative long positions in U.S. gold futures even after such positions eased slightly from record highs in the week ended September 29, putting a cap on prices.
At the same time, physical demand emerged at the market's lows last week to underpin prices.
The market appeared more resilient than in March 2008 when it failed to sustain gains after scaling record highs, taking nearly a year to retest the $1,000 level, traders said. But an attempt at an all-time high this time was likely to take a while.
Long futures positions likely increased over the past week, showing how persistent those longs are. Wariness about them is capping prices, but it doesn't seem like selling momentum is building either, said Yuichi Ikemizu, Tokyo branch manager for Standard Bank.
Selling pressure isn't as strong as last year, with physical demand emerging when prices fell toward $980 last week to underpin the market. At the same time, nobody is chasing up the market, he said, adding that he expected prices to stay in a range between $980 and $1,010 for a while.
Spot gold had inched up 0.2 percent to $1,003.55 an ounce as of 0240 GMT, after posting a weekly gain of 1 percent last week.
The precious metal reclaimed the $1,000-an-ounce level after a choppy session on Friday when the greenback fell in response to U.S. employers cutting more jobs than expected in September, sending the unemployment rate to a 26-year high of 9.8 percent.
U.S. gold futures for December delivery were barely changed at $1,004.8 per ounce, compared with $1,004.3 an ounce on the COMEX division of the New York Mercantile Exchange. The December contract had hit the day's low of $987 an ounce on Friday.
Non-commercial net long positions in gold futures on the COMEX division of the New York Mercantile Exchange eased to 231,386 lots for the week ended September 29 from an all-time high of 236,749 lots the week before, figures from the Commodity Futures Trading Commission showed.
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,096.548 metric tons as of October 4, up 0.1 percent or 1.221 metric tons from the previous business day.
The dollar remained under pressure on Monday after falling against most major currencies on Friday.
Finance ministers from the Group of Seven industrialized nations said at a meeting in Istanbul at the weekend that too much volatility in the foreign exchange market could hurt the global economy and financial system.
While G7 officials had a chance to address concern that a further dollar slide could hurt many countries' exports, they merely recycled verbatim the language on exchange rates that appeared in its statement six months ago. The failure to break new ground on currency rates leaves the door open to more dollar weakness in coming months as the U.S. economy struggles with its trade and budget deficits.
The G7 statement didn't move the currency market, so the impact on gold was virtually nil, Standard Bank's Ikemizu said.
The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its bullion holdings nudged down 3.53 metric tons, or 0.04 percent, from the previous day to 8,594.22 metric tons on Friday, the lowest level since late May.
Traders said investor appetite for silver was hurt by copper's fall to two-month lows on Friday when the weak U.S. jobs data eroded confidence in demand prospects. The two precious metals move similarly and closely on the outlook for industrial demand.
Precious metals prices at 0240 GMT
Metal Last Change Pct chg YTD pct chg Turnover
Spot Gold 1003.50 2.20 +0.22 14.01
Spot Silver 16.17 0.05 +0.31 42.84
Spot Platinum 1281.00 3.00 +0.23 37.45
Spot Palladium 293.50 -0.50 -0.17 59.08
TOCOM Gold 2908.00 18.00 +0.62 13.02 27280
TOCOM Platinum 3714.00 20.00 +0.54 40.05 6795
TOCOM Silver 469.40 0.60 +0.13 47.01 270
TOCOM Palladium 852.00 14.00 +1.67 54.91 101
TOCOM prices in yen per gram, except TOCOM silver which is priced in yen per 10 grams. Spot prices in $ per ounce.
(Editing by Chris Gallagher)