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Gold held its ground on Monday as the US dollar suffered a short-lived dip.
The yellow metal closed 70 cents lower at US$1,187/oz in London, less than US$2 higher than last week's nine-month low, as the greenback slipped below the 94-euro cents mark in early trading, before recovering to around 94.5 euro cents.
Gold has fallen around US$100 since Donald Trump's US presidential election victory, partly due to a strengthening dollar linked to the president-elect's proposals to greatly increase infrastructure spending.
"It is likely that the overnight dollar weakness was nothing more than some profit-taking and the short-term trend for the dollar may continue higher," Kitco's Peter Hug said.
"The dollar and US yields continue to be the predominant drivers in the gold trade."
Despite the positive outlook for the dollar, gold may be supported by political uncertainty, according to Metal Bulletin analyst William Adams.
"But with a lot of significant political uncertainty lying ahead, we expect bargain hunting in gold to support prices – gold should provide a good hedge against fallout from what political policy changes lie ahead, as well as from any correction in super-charged markets," he said.
Analysts are divided over gold's prospects for 2017, with ABN AMRO forecasting a fall to US$1,100/oz and ICBC Standard Bank remaining bullish. Silver ended Monday 21.5 cents higher at US$16.68/oz.