Gold up leaving back losses of 3.5 percent (Reuters) (10-01-2011)

SINGAPORE – Spot gold was higher on Monday after losses of 3.5 percent in the first week of 2011 on fears for the euro zone debt crisis.

Spot gold edged up 0.4 percent to $1,374.10 an ounce by 0717 GMT. U.S. gold futures also gained 0.4 percent to $1,374.1.

According to a Reuters analysis, spot gold is about to go back at Friday’s low at $1,352.30 per ounce before developing a second round of rebound toward $1,388.

Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, continued to slide, falling about 1.5 tonnes to a seven-month low of 1,271.164 tonnes by Jan 7 while China's gold output is expected to have exceeded a record high of 340 tonnes in 2010, as gold prices hit a series of all-time highs.

Last Friday's U.S. non-farm payrolls data were unexpectedly weak as a surprisingly large number of people gave up searching for work.

The dollar steadied after rising to its highest level since Dec 1, as fears over sovereign debt crisis in the euro zone kept the euro to four-month lows against the U.S. currency.

Source: Reuters