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Apr 16, 2012, 09.14 AM IST
Gold edged down on Monday, extending losses made in the previous session, as the dollar firmed on worries about Spanish debt yields and the pace of Chinese economic growth, while platinum also sank to its lowest level in more than two months.
Spot gold lost nearly 1% in the previous session, as a selloff in riskier assets spilled over, although bullion still managed to post a 1.7% weekly rise -- its biggest one-week gains since late February.
Weaker-than-expected economic growth in China in the first quarter weighed on financial markets, at a time that the US recovery momentum seems to be slowing and fear about the euro zone debt crisis resurfaced.
"The market in general is feeling a bit risk-averse and we can see commodities weaker across the board," said Nick Trevethan, senior commodity strategist at ANZ in Singapore.
"Gold is at a crucial point now, as USD 1,650 is a very important support level. If prices break below the level, we may see a flight to USD 1,620."
Spot gold lost 0.4% to USD 1,651.26 an ounce by 0218 GMT. US gold slid half a percent to USD 1,652.50.
Technical analysis suggests spot gold will drop to USD 1,630 an ounce during the day, Reuters market analyst Wang Tao said.
The dollar index rose to its highest in a week and half, extending gains from Friday.
Activities in Asia's physical market was sluggish, as buyers remained on the sidelines, awaiting a further drop in prices.
"Since we failed to break below USD 1,650, today is mostly likely another quiet day," said a Singapore-based dealer. "We are back to square one."
Spot platinum slid more than 2% to USD 1,559 an ounce, its lowest in more than two months, before recovering slightly to USD 1,568.94.
Platinum, mainly used in autocatalysts and jewellery, is prone to economic downturns. Prices fell more than 20% last year due to the turbulences in the global economy.
Spot silver dropped to a one-week low of USD 31.27 an ounce, before paring losses to USD 31.43. The metal slid 2.5% last session.
Speculators cut their net long exposure in gold and silver in the week ended April 10, said the US Commodity Futures Trading Commission.
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