Spot Gold Prices ended Monday in London $1 below Friday's three-week closing high, after trading in a tight range throughout the day.
With New York shut for Labor Day, gold bullion prices were unchanged against the Euro. Gold Priced in Sterling dipped to stand 70 pence lower by the end of European trade.
"Our expectation is that gold has some upside potential in the short and medium term," says Frederic Panizzutti at MKS Finance.
"We still keep $700 an ounce as a target for the year but for the very short term, the dominant factor will remain the Dollar...We see more potential on the upside at this stage than on the downside."
Earlier in Mumbai, Indian gold dealers had reported a slow start to the week following strong Gold Buying over the weekend.
"Tomorrow is Janmasthami, so everyone is in a holiday mood," said Haresh Acharya, head of bullion at Parker Agro Chem Export in Ahmedabad to Reuters. "Sales were good earlier and in the next few days we are expecting good buying, too."
"More than Janmasthami, it is Ganesh Chaturthi [on Sept. 15] for which people are buying," said another dealer.
Meantime in the Western finance markets, Merrill Lynch said today that volatility in US government bonds rose last month to the highest level since May 2004 as investors piled in to the "safe haven" of US public debt.
Model-driven computer trading exacerbated the flight into Treasuries, which saw prices in Aug. rise at their fastest pace since the 9/11 attacks of 2001.
European equity markets were quiet on Monday, adding just 0.3% to the FTSE Eurofirst 300 index. A report from the Bank for International Settlements said the market rout in August was less severe than the fall-out that followed the collapse of Long-Term Capital Management in 1998.
A report from Standard & Poors, the global ratings agency, said last week that the outlook for finance and securities companies is now much worse than after the LTCM crisis.
For a thoughtful take on what the return to full-time trading tomorrow may presage this autumn, click here and read on now...