TOKYO (Reuters) - Cash gold fell in Asian trade on Monday, reversing earlier gains and nearing a one-month low touched last week below $905 as the dollar gained ground against other major currencies.
Spot gold briefly rose above $920 an ounce, but reversed course and slipped more than 1 percent to $907.30.
By 3:08 a.m. EDT, gold was trading at $908.80/909.60, compared with $916.60/917.40 in Asia late on Friday. Gold was trading around $920.30/921.10 in late New York trade on Thursday before U.S. and European markets closed for the Good Friday holiday.
In Asia, markets in Hong Kong and Australia remained closed for Easter Monday, but markets in India and Singapore reopened.
Gold hit a record high last Monday at $1,030.80 as concerns about deepening financial market troubles in the United States hit the dollar and raised gold's allure as a safe-haven asset.
But the dollar has steadied against other major currencies, helped by a series of aggressive efforts by the Federal Reserve to ease the credit crisis.
"Investors had fled to cash and gold as fears about the liquidity crunch heightened in the United States, but that flight was coming to a halt given joint efforts by the Fed and the Treasury Department," said Yuki Sonoda, adviser at Daiichi Commodities Co, referring to the proposed takeover of troubled U.S. investment bank Bear Stearns (BCS.N: Quote, Profile, Research).
"A sell-off in all commodities late last week means that a reversal mode has set in," he said
On Thursday, gold bottomed at $904.65, a level last seen on February 18, as investment funds cashed in bullion to cover losses in other financial markets.
The dollar rose 0.2 percent to 99.85 yen from late Asian trading on Friday. The dollar hit a 13-year low of 95.77 yen on electronic trading platform EBS early last week.
The euro fell 0.5 percent to $1.5360 from around $1.5445 in late Asian trading on Friday, slipping further from a record high of $1.5905 struck on EBS last week.
"The market is still in a phase of adjusting overbought positions. A further recovery in the dollar is expected to prompt sales in gold," said Tatsuo Kageyama, analyst at Kanetsu Asset Management in Tokyo.
"But falls in gold should be limited at around $850, where buying from India is expected to emerge."
COMEX gold futures slid more than 1 percent in Asia. The most active April contract on the COMEX division of the New York Mercantile Exchange stood at $907.50 an ounce, compared with Thursday's settlement of $920.
Gold futures on the Tokyo Commodity Exchange (TOCOM) fell, with the most active February delivery dropping 2.8 percent as far as 2,933 yen per gram -- the lowest for a benchmark since January 22.
Key TOCOM silver futures fell by their daily 40-yen limit to 555.6 yen per 10 grams.
TOCOM platinum futures for February delivery was unchanged at 5,745 yen per gram.
Spot platinum was little changed at $1,850/1,860 an ounce from late Asian trade on Friday.
Spot silver fell to $16.86/16.91 an ounce from around $17.07. Palladium edged down to $427/433 an ounce from around $431.
(Reporting by Risa Maeda and Chikafumi Hodo)
GNL Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
