Gold was steady on Monday after briefly falling below $990 an ounce, as the euro trimmed some losses versus the dollar, but bullion looked vulnerable to a long liquidation after it failed to stay above $1,000 an ounce.

Physical demand was also supportive for the precious metal, traders said, who saw the jewellery demand picking as as the festive period in India, one of the top gold consumers of the world, approches.

Spot gold was at $991 an ounce by 1121 GMT, slightly up from $990.95 an ounce late in New York on Friday, when gold hit a two-week low of $984.70 an ounce.

“The stronger dollar is the reason which pushed gold below the $1,000 an ounce level,” said Eugen Weinberg, Commerzbank analyst said. “On the other hand, we’d expect a pick-up in physical demand if prices decline ahead of the festive season.”

Gold’s inverse relationship with the dollar over the past few weeks

The dollar rose broadly on Monday, hitting a near two-week high against the yen, as traders trimmed short positions in the U.S. currency following broad losses so far this month.

Against the yen, the dollar rose more than a full percent, after speculative flows pushed it higher in quiet trade in Asia, where markets in Japan, Singapore and other centres were closed for holidays.

In the absence of economic events or data, traders took profits on currencies which have rallied against the dollar, including the euro, up more than 2 percent so far this month.

Analysts said some investors were becoming concerned that short dollar positions were overstretched, suggesting that a near-term correction may be in store.

“There’s already a lot of long euro/dollar positions in the market so it’s difficult to push the pair higher,” said Lutz Karpowitz, currency strategist at Commerzbank in Frankfurt.

Data from the Commodity Futures Trading Commission showed that currency

European shares touched a 10-month high on Friday on optimism for a global economic recovery and with Nokia and results from U.S. bellwethers boosting the technology sector.

The FTSEurofirst 300 <.FTEU3> index of top European shares rose 1 percent to 978.34 points. Over the week, the index climbed 1.2 percent, its sixth weekly gain in the last seven weeks.

The European benchmark index is up more than 51 percent from its lifetime low of March 9, as investors have become more confident on the prospects of economic recovery.

“Things look good for the time being, but the higher we go the more we could be setting ourselves up for a disappointment,” said Andy Lynch, a fund manager at Schroders.

“The world economy is doing well, French and German GDP are positive, but that’s not surprising given the amount of stimulus being pumped into the market. I have a concern about what happens when the sugar

Gold eased on Wednesday, giving up earlier gains, as the dollar recovered losses against the euro after U.S. durable goods data failed to impress, tempering appetite for the metal as an alternative asset.

But prices remained rangebound as traders awaited clearer direction from the currency markets.

Spot gold was bid at $941.80 an ounce at 1523 GMT, against $943.55 an ounce late in New York on Tuesday. Earlier it rose as high as $949.85.

U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange were down $1.8 at $944.20 an ounce.

“We are probably going to stay fairly rangebound,” said Standard Bank analyst Walter de Wet. “We would have to see some decent dollar weakness for gold to move above $956-960.”

The dollar rose versus the euro and a currency basket, reversing early losses, after durable goods numbers from the United States.

The data showed June orders for durable goods, excluding transportation,

Gold and silver prices climbed to their highest in seven weeks on Monday, as the dollar’s slide to its lowest since mid-December boosted interest in hard assets.

Spot gold hit an intra-day high of $961.00 an ounce, its highest since June 11, and was bid at $959.10 an ounce at 1329 GMT, against $953.90 an ounce late in New York on Friday.

U.S. gold futures for August delivery on the COMEX division of the New York Mercantile Exchange rose $5.70 to $959.40 an ounce.

“At the moment we’re seeing the dollar as the key factor to movements in the gold market,” said Eugen Weinberg, senior analyst at Commerzbank.

“In the past few months (gold) has gone from being a safe haven to becoming a dollar play. The dollar right now is so weak because no one is looking for a safe haven — because corporate results are so good and stock markets are performing so well.”

Silver was

Traders patiently watching the zloty’s climb against the dollar in 2009 have fairly good evidence of an imminent reverse trend.  A glance at the five-year chart shows that USD/PLN has now twice bounced off some fairly important support levels.  Furthermore, intuitively the breakdown makes sense.  Per a Bloomberg report today, Ulrich Leuchtmann, head of foreign- exchange research at Commerzbank in Frankfurt, opined that currencies in eastern Europe were starting to come under pressure.  “It’s a natural correction from the very upbeat sentiment that we saw recently.  From a fundamental point of view such a quick recovery didn’t make much sense,” he said.  Thanks to JB3 over at Xtrends, by the way, for pointing out this setup.

Gold was flat until the mid-point of the Hong Kong session on Monday, fell steadily from there to a low of $920 in the second hour of Comex trading, then rallied modestly through the rest of the day to regain a little lost ground and finish at $924.90/oz., down $3.90 from Thursday. Overnight, gold is slightly higher. Platinum plummeted from the far East to the New York open, then traded rangebound between $1140 and $1150 through the day, ending at $1144/oz., down $39. Overnight, platinum has been flat.

Silver plunged from its $13.40 peak in Hong Kong to as low as $12.98 in New York’s first hour, then staged a powerful comeback to the noon hour that left it just short of break-even, before flattening out the rest of the day and closing at $13.25/oz., down just 10 cents. Overnight, silver is unchanged. (Click here for charts)

Precious

Gold fell to a one-week low on Tuesday, dropping sharply as the dollar strengthened broadly and crude oil prices tumbled, reducing the metal’s appeal as an inflation hedge.

Spot gold was bid at $925.20 by 1520 GMT after hitting an intra-day low of $922.60, the lowest since June 24. Earlier it hit a high of $944.70.

The precious metal reversed earlier gains when the dollar, which has been under pressure, gained against a basket of currencies after U.S. consumer confidence data.

“Obviously, in these days where everything is linked together, from crude prices to the price of gold, any change to people’s view of the economy and inflation expectations will cause a reaction,” said Ole Hansen, an analyst at Standard Bank.

Adding to the bearish signals for gold prices, crude oil dropped nearly 3 percent.

While investing in gold is usually seen as a hedge against risk, a strengthening dollar makes it relatively more expensive for holders

In the energy market on Friday, crude for August delivery slipped, closing at $69.16/barrel, down $1.07. July reformulated gasoline lost 2.42 cents, to $1.8741/gallon. Crude wrapped up its second straight week of decline, as traders seem to have turned sour on the prospects of recovering global demand. For the month, however, oil is still up more than 3%.

“The latest oil price increase to over $70 a barrel is not justified by current fundamentals, [although] it cannot be ignored that the oil market has improved,” wrote analysts at Commerzbank. “The underlying demand remains week.”

In a potentially positive development the Movement for the Emancipation of the Niger Delta, or MEND, say they are studying an amnesty offer announced by Nigerian President Umaru Yar’Adua, but will turn in their heavy weapons by the August 4th deadline stipulated in the document.

The group, however, objects to the term “amnesty,” saying that, “We are

Gold was dead flat until an hour before New York opened on Thursday, at which point it commenced a daylong rally that pushed it higher, albeit not very dramatically, as it plodded to a finish at $938.90/oz., up $6.80. Overnight, gold is trending higher.

Platinum finally constructed a solid day, adding $20 during the Comex session and ending at $1185/oz., up $27. Overnight, platinum is pushing higher.

Silver buyers kept appearing after every selling spell, slowly inching the metal higher, and it closed just off its intraday highs at $13.99/oz., up 16 cents. Overnight, silver is sharply. (Click here for charts)

A strong day for platinum, though hardly a banner one for the other precious metals. Nevertheless, gold and silver both finished comfortably in the green.

The day’s disappointment had to be that gold and silver didn’t do even better, considering that the usual suspects were leaning in their favor,