Stocks slipped in Asia and the euro fell upon anxiety the euro zone's debt crisis will dampen global growth following the Greek government said it will miss a deficit target set just months ago inside a massive bailout package.
Spot gold added $9. 29 a good ounce to $1, 632. 24 by 0308 GMT. Gold had posted a quarterly gain of 8% -- its biggest this season, despite a drop of 11% for September, its largely monthly decline in 3 years.
"Gold rises despite a firmer US dollar... perhaps gold's appeal like a safe haven asset has been reinstated. Also, the market seems to be buying on the dip, " said Natalie Robertson, the commodities strategist at ANZ.
"Now there appears to be strong buying interest for the $1, 500 an ounce level. "
US gold flower $11. 7 to $1, 634 an ounce.
Gold jumped to some lifetime high around $1, 920 an ounce in early September following the euro fell against the dollar on growing doubts about Europe's capability to solve its debt crisis.
European Central Bank member Christian Noyer said on Monday it's unrealistic to expect an increase in Europe's bailout fund beyond that which was agreed in July, but that he is open to schemes that could allow leveraging to expand capacity.
Jitters over the spiralling Western debt crisis, European banks' exposure to sovereign debt along with a slowing global economy caused investors to cut their bets on risky assets within the July-September quarter, sending the euro down almost 10 cents versus the dollar within the period.
In the physical market, tight supply persisted following a recent drop in bullion prices triggered aggressive buying throughout Asia.
"Basically people are trying to fulfil the purchases. I don't have much stock. There's still some buying around as well as advance booking, " said a physical dealer in Singapore.
Premiums for gold bars were steady at $2 an ounce to identify London prices in Singapore. Demand from top consumer India can also be picking up during the wedding season, when gold jewellery is an essential the main dowry basket.
In India, retail gold demand traditionally gains pace in the month of August, when the festival and wedding months start, culminating with Diwali, the Hindu festival of gentle.
"Precious metals are expected to trade higher this week and throughout this month because they recover from the late-Sept selloff. The gold market might advance toward the $1, 675-$1, 700 range while metallic trades toward $33. 00, " said precious metals as well as energy analyst at MF Global Tom Pawlicki. "After an undesirable showing and high volatility in September, metals could recover this week because of favourable quarter-end seasonal patterns, the ongoing uncertainty in European countries, a developing economic slowdown in China, and from the increased potential of the double-dip recession in the US"
The euro plunged for an eight-month low against the dollar on Monday and is actually poised to fall further, with Europe still divided within the best cure for the debt crisis and with the chance of a Greek default looming larger than ever.
The actual dollar index hit an eight-month high, edging up 0. 5% in order to 78. 888.
Oil fell more than a dollar on Monday upon growing fears the euro debt crisis may spread to other areas of the region and dampen global oil demand.
Source : Business-Standard