Gold fell for a second straight session on Monday after hitting its highest in a year last week, as fears over the global economy eased and stock markets rebounded.
Spot gold had eased 0.4 percent to $1,232.20 an ounce by 0030 GMT, after dropping 0.7 percent on Friday.
Bullion had climbed to a year-high of $1,260.60 on Thursday as turmoil in global equities stoked safe-haven demand for the metal, along with the Japanese yen and US Treasuries. Gold was also helped by growing expectations that the Federal Reserve would not be able to raise US interest rates this year.
But U.S. and European shares rebounded on Friday as reassuring US retail sales data boosted sentiment, reducing demand for gold. The yen also nursed losses early on Monday, having retreated from its highest in over a year.
The focus will now shift to China, where markets reopen on Monday after the week-long Lunar New Year holiday.
Gold is about $60 an ounce higher than Feb. 5, when Chinese markets were last open. Traders have said Chinese could sell bullion as they look to take profits.
Other Asian markets have shown little interest in the yellow metal as a sharp rise in prices over a short period of time has put off buyers.
Western investors have been more active buyers.
Last week’s rally spurred a buying frenzy for US bullion coins as small and large investors bet that volatile currencies and global economic concerns would lift its value even higher.
Hedge funds and money managers boosted bullish bets in COMEX gold futures and options in the week to Feb. 9 ahead of the bullion market’s biggest daily rally in years, US Commodity Futures Trading Commission data showed on Friday.
Assets of SPDR Gold Trust, the top gold-backed exchange-traded fund, fell 0.71 percent to 710.95 tonnes on Friday, but the fund had seen sharp inflows before that.
Asian shares bounced on Monday, though investors feared fireworks as Chinese markets reopen after the holidays to find there had been a major reversal in the US dollar and a worldwide rout in equities.
China Trade data Jan 1000 Euro zone Eurostat trade Dec PRICES AT 0030 GMT Metal Last Change Pct chg Spot gold 1232.2 -5.46 -0.44 Spot silver 15.692 -0.018 -0.11 Spot platinum 950.05 -1.19 -0.13 Spot palladium 517.9 -1.57 -0.3 Comex gold 1232.8 -6.6 -0.53 Comex silver 15.715 -0.075 -0.47 COMEX gold and silver contracts show the most active months