Asia's bullion buyers stood on the sidelines of the market apart from occasional buying on price dips on Thursday, as caution dominated during the summer lull.
Spot gold broke below $1,560 an ounce on several occasions this week, each of which brought an increase in physical demand, but that demand vanished once prices rebounded. Cash gold stood at $1,567 an ounce by 0713 GMT.
The strength in the dollar has also weighed on demand from Asian buyers.
"The strong dollar makes local prices, such as in (Indonesian) rupiah, not very attractive," said a Singapore-based dealer.
Still, jewellers and bullion dealers were interested in bargain-hunting at price dips, she added.
The greenback rose to a two-year high against a basket of currencies, as euro zone's debt crisis continued to weaken the single currency.
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Gold bar premiums in Singapore improved slightly on some pickup in demand, at 80 cents to $1 an ounce above London prices.
While in Hong Kong, premiums were mostly steady, in the range of $1 to $1.40 an ounce, dealers also said.
"The market is very quiet even though prices are falling towards previous lows, as demand is lacklustre due to a slowdown in the economy and the summer holiday," said Dick Poon, manager of precious metals at refiner Heraeus in Hong Kong.
INDIAN BUYING SLOWS
"Buying has slowed as there is violent fluctuation in prices," said Pankaj Kumar Agarwal, director with wholesaler Brijwasi Bullion in the northern Indian city of Lucknow.
Consumers are waiting for prices to go below 28,000 rupees per 10 grams, down 4 percent from the current price of 29,276 rupees, he added.
In India, traditionally the world's biggest gold consumer, Bullion hit a record of 30,428 rupees per 10 grams on June 19.
India's gold market slackens during the monsoon season, and picks up in September when people start to prepare for the Diwali festival and the wedding season.
"For Diwali, demand will start from September, which is expected to be dull as prices are very high and people are more interested in selling than buying," said Mayank Khemka, managing director at Khemka International, a wholesaler in New Delhi.
Festivals in India will start in August and continue till November. Wedding also takes place during this period.
WEEK AHEAD
Traders were eyeing the progress of monsoon rains in India, which are vital for growth of crops and income of farmers. About 60 percent of gold demand comes from rural areas.
The development in the euro zone and data flow from the United States as well as other key economies will dominate market sentiment.
(Editing by Daniel Magnowski)