The Australian share market is expected to open a little weaker,...

The Australian share market is expected to open a little weaker, when trading resumes after a long weekend, following volatile trading in global markets.

The local bourse is closed on Monday for the Australia Day public holiday but is set for a soft start when brokers return on Tuesday.

On Friday in New York, stocks ended down after a volatile session during which fears about a US recession offset good profit news in the technology and engineering sectors.

The Dow Jones industrial average lost 171.44 points, or 1.38 per cent, to 12,207.17, the Standard & Poor's 500 index dipped 21.46 points to 1,330.61 and Nasdaq Composite index shed 34.72 points to 2,326.20.

In overnight trading on the futures exchange on Friday, the Australian share price index futures contract for March fell 75 points to 5810, pointing to a weak open for the local market.

But a soaring gold price could limit any losses, as resources stocks get an expected bounce from a new record for the price of the yellow metal.

Gold hit a record high of $US923.40 an ounce in New York on Friday, beating its previous peak around $US914.

Gold has been lifting as investors buy to metal to hedge against inflation and amid general nervousness in financial markets about the world economic outlook.

Experts have tipped gold to reach above $US1,000 an ounce this year, and possibly as high as $US1,250.

But AMP Capital senior economist Bob Cunneen said investors should remain cautious, given the strong decline on the Australian market last week.

"Further share market falls are likely in the short term before the market stabilises and can enter a new bull market," he said.

"Tighter global credit conditions and the risk of a US recession will see share markets nervous and volatile for the next six months.

Last week, the Australia market suffered its biggest one day fall since October 1987, when stocks fell seven per cent on Tuesday.

But the local bourse recovered its losses by Friday, up five per cent, as commodity prices rose.

Brokers remain concerned that the market is now set for a "bear" phase, after years of increasing returns, and although some analysts believe the rout could be short lived.

"We now expect the all ordinaries index and S&P/ASX200 to claw their way back to around 6,000 points by mid-year and to 6,700 points by the end of 2008," Commsec chief economist Craig James said.

"While valuations and fundamentals are exceptionally positive, sentiment is fragile, restricting the potential for stronger sharemarket gains."

On Friday, the benchmark S&P/ASX200 index closed up 279.9 points to 5,860.3 and the All Ordinaries gained 280.5 points to 5,886.3.

Looking ahead this week, the earnings season kicks off with Alumina Ltd reporting its 2007 full year results on Thursday.

Australia's biggest retail group Woolworths Ltd will publish its second quarter sales figures on Wednesday.

Elsewhere, resources companies Oilsearch Ltd, Lihir Gold Ltd, Perilya Mines Ltd, Origin Energy Ltd and Energy Resources of Australia Ltd post their latest production reports.

It's a thin week for economic data, with financial markets focussed on the Reserve Bank of Australia board meeting on February 5, when the central bank is widely expected to lift interest rates.