By Nithin ThomasPrasad
REUTERS - Gold prices dropped on Monday and hovered around one-month lows hit last week, as the U.S. dollar firmed and concerns over the Korean peninsula eased.
Spot gold was down 0.4 percent at $1,291.60 per ounce as of 0646 GMT, not far from last week's near one-month low of $1,287.61. Prices of the yellow metal dropped about 1.7 percent last week in their second consecutive weekly decline.
U.S. gold futures for December delivery slipped 0.2 percent to $1,295.00 per ounce.
"(Angela) Merkel's win in the German federal elections and a quiet news weekend on the North Korean front, saw the U.S. dollar opening stronger and gold's weekend safe-haven premium eroded from Friday," said Jeffrey Halley, a senior market analyst with OANDA.
The dollar index was up 0.2 percent at 92.32 against a basket of currencies.
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The euro slipped after Merkel won a fourth term in a weekend election, but faced leading a much less stable coalition in a fractured parliament as support for the far-right party surged.
"I guess markets are relieved about the ongoing sanctions against North Korea. If you see what China and (U.S. President Donald) Trump have done last week, it seems they are trying to achieve a peaceful resolution," said OCBC analyst Barnabas Gan.
On Sunday, the United States said it has added North Korea to its list of countries that are banned from entering the country.
"The U.S. Federal Reserve started its balance sheet reduction last week as well as still pricing in one-time rate hike by year-end," Gan said.
Last week, the Fed announced it would begin trimming down its $4.5 trillion in assets and signalled it will likely raise rates again this year.
"This still has a strong influence in pushing gold prices lower as well," Gan said.
Meanwhile, physical gold demand remained soft across Asia this week despite a downwards price correction as consumers awaited further dips in rates, while a government move to bring transparency to bullion trading kept buyers on the sidelines in India.
In other precious metals, silver slipped 0.5 percent to $16.87 per ounce. Prices fell over 3.5 percent last week in the biggest weekly decline since early July.
Platinum fell 0.2 percent to $928.50 per ounce, but hovered around an eight-week low hit on Thursday. It shed 3.5 percent last week in its second consecutive weekly fall.
Palladium gained 0.9 percent to $924.50 per ounce.
(Reporting by Nithin Prasad in Bengaluru; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
