Gold suffering from weak demand

Gold is on a weak footing with physical demand insufficient to provide a firm floor for prices, Barclays said in a note.

Festival-related buying in India last week was below expectations, the bank said, with Asian demand generally offering only a "soft" floor.

Outflows in gold ETFs (exchange traded funds) in March were absorbed by the physical market. "Although there is a ready buyer for net redemptions, demand is not strong enough to set a firm floor," Barclays said.

FED FOCUS

The market will shift focus to the US Federal Open Market Committee meeting on Wednesday, although Barclays does not expect any meaningful change from last month's statement or any movement in interest rates. The bank continues to expect a September rate hike.

GREECE CRISIS

Concerns over Greece's debt may offer support for gold, however. "There is likely still to be considerable speculation on the markets about how long Greece will continue to be solvent, so demand for gold should remain solid," Commerzbank said in a note.

Gold will remain range-bound with Greece fears offering support, Standard Bank said previously.

PRICES

Gold closed up US$17 at US$1,200/oz in London on Monday, with silver up one cent at US$15.84/oz.