Gold bounces off 5-1/2-month low on physical buying

Gold crawled higher in Asian trade on Monday, snapping a 3-session losing streak, helped by physical buying after the metal slid to a 5-1/2-month low on Friday.

Spot gold was up 0.3 percent at USD 1,211.72 an ounce by 0240 GMT. In the previous session, the metal fell as much as 1 percent to mark its lowest since May 30 at USD 1,203.52.

US gold futures were up 0.2 percent at USD 1,211.50 per ounce. "The low prices have induced some interest in the physical market," said ANZ analyst Daniel Hynes.

"However, the dollar has got some momentum behind it and until a turnaround, it is going to be difficult for gold prices to recover."

The dollar index, which measures the greenback against a basket of major currencies, was steady at 101.200 after climbing to its highest level since 2003 on Friday on continued bets of faster inflation and higher interest rates.

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