Gold rises on dollar drop, Fed's Bullard comment

London (Nov 4)  Gold rose in quiet trade
on Monday, lifted by a dollar drop and comments by a senior Fed
official that the U.S. central bank should keep up its monetary
stimulus.
    Bullion investors looked toward U.S. jobs data later this
week for trading cues. The precious metal was moving in a $10
range with less-than-average turnover due to a light schedule of
U.S. economic indicators on Monday, traders said.
    Gold prices were supported after St. Louis Federal Reserve
President James Bullard told CNBC television that the Fed should
not rush a decision to scale back its asset purchase program
because of low inflation.
    Some investors stayed on the sidelines ahead of Friday's
all-important October U.S. nonfarm payrolls report, which will
give financial markets an idea on whether the U.S. central bank
will maintain its bond-buying stimulus for a while longer.
    "Gold is still very dependent on economic weakness and
extended quantitative easing to prosper at the moment," said
Saxo Bank's head of commodity strategy Ole Hansen.
    The metal was also underpinned by fresh buying and short
covering triggered by a drop earlier in the day toward technical
support around $1,300 an ounce, Hansen said.
    Spot gold was up 0.2 percent at $1,317.30 an ounce by
12:05 p.m. EST (1705 GMT), after falling nearly 3 percent last
week.
    U.S. gold futures for December delivery were up $4 an
ounce at $1,317.20.
    Outflows from gold-backed ETFs resumed on Friday, when
holdings of New York's SPDR Gold Shares declined 5.7
tonnes, their largest one-day outflow since Oct. 21.
   
 INDIA PHYSICAL DEMAND WEAK
 The sharp drop in prices last week has failed to revive
physical demand, and some dealers say the price may have to fall
below $1,300 to attract more buyers.
    Indian demand was muted during the biggest gold-buying
festivals of Dhanteras and Diwali, celebrated on Friday and over
the weekend, with many opting for cheaper silver due to high
gold premiums and the scarcity of the metal on the domestic
market.
    Silver was down 0.2 percent at $21.78 an ounce.
Platinum was up 0.3 percent at $1,447.70 an ounce and
palladium was up 1.1 percent at $745.72 an ounce.