Spot gold down from Friday's $909/oz high

Spot gold was trading off its historic high of $936 an ounce, hit early Friday, on the back of follow-through selling and dollar gains after data late on Friday showed stronger-than-expected US manufacturing activity in January.

At 1.22 pm, spot gold was at $909.30, up $1.40 from Friday's close.

Three out of four primary dealers from public sector banks polled on Monday saw the correction to be a good buying opportunity with strict stop losses in place.

"Short-term technical charts show a sideways trend. We believe every dip to be a good buying opportunity," said a Mumbai-based dealer.

The dealers also said as long as the greenback does not breach the crucial $1.4774 support level versus the euro, gold could correct from current $909-910 levels.

At 1.35 pm, the dollar was slightly weak versus the euro at $1.4844 compared with Friday's close of $1.4802. Early Friday, the euro was at $1.4956, just shy of historic high of $1.4968 hit on November 23.

Only one bank dealer was of the view that gold has hit its top, at least in the short-term, and expects follow-through selling to see gold dipping below $900.

"Anything above $913 to $915 is a good sell, with stops at $920 for a target of $895," said the dealer.

This Mumbai-based dealer sees strong support at $905 at which longs can be initiated with stops at $900 for a target of $916.

The four dealers all emphasized these were positional and not intraday calls.

Another Mumbai-based bank dealer sees $904.25 as a "very good support level" at which longs can be accumulated with stops at $897.50 for a target of $920.