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Investors on Friday had increased bullish bets on bullion after prices broke through tough resistance at $1 300 an ounce, with weak US manufacturing data and uncertainty over 's economic expansion lifting the metal's safe haven appeal.
Gold hit a low of $1 318.71 an ounce earlier in the session, but stood at $1 327.00 by 09:10, up $3.99. Last week's rally lifted prices to a 3-1/2 month high at $1 332.10, and gold has gained more than 9% so far this year.
"I think $1 335 seems to be capped for the time being," said the chief dealer at Lee Cheong Gold Dealers in Hong Kong, referring to the next resistance level.
"There are small amounts of buying in the physical side, although selling is also not that much. Premiums haven't changed at all," he said.
Premiums for gold bars in Hong Kong were stuck in a wide range of $1.30 to $1.70 an ounce to spot prices, unchanged from last week..
Political tensions in have yet to spur safe-haven buying but could affect trading activity. Prime Minister has left and is staying 150km away, her office said on Monday, without specifying the location.
"I spoke to the Thais and although there are only small deals here and there, generally people are still doing business as usual," said a physical dealer in .
Gold premiums in , a centre for bullion trading in , were also unchanged from last week at $1.20 to $1.50 an ounce to the spot prices.
"Physical demand is slow, but I saw some buying at around $1,320 after copper prices dropped more than 1 percent earlier," said another physical dealer in .
copper fell sharply on Monday to its lowest in more than two weeks as worries about tightening monetary policy in the and fragile growth in hurt the demand outlook for industrial metals.
U.S. gold was at $1,327.10 an ounce, up $3.50.
Holdings of the largest gold-backed exchange-traded-fund (ETF), increased 0.34% on Friday from Thursday, and the largest silver-backed exchange-traded-fund (ETF), rose 0.65% during the same period.
In other markets, Asian stocks dropped on Monday, rekindling safe-haven demand for the yen, as plunging property stocks took a toll on and investors continued to fret about the impact of the US Federal Reserve's stimulus withdrawal.
The world's top economies have embraced a goal of generating more than $2 trillion in additional output over five years while creating tens of million of new jobs, signalling optimism that the worst of crisis-era austerity was behind them.
