TOKYO (Reuters) - Gold slipped toward $940 on Monday to extend losses from late last week when lackluster U.S. consumer confidence data clouded the economic outlook, causing oil to fall and dulling the metal's appeal as an inflation hedge.
The precious metal is now nearing the month's trough of $939.40 marked last week, while its fate remains closely tied to an inverse correlation with the dollar.
"Gold's decline on Friday was seen as pretty negative and the market's just on a bit of a follow-through this morning," said Adrian Koh, an analyst at Phillip Futures in Singapore.
Bullion ended lower on Friday as the weak U.S. consumer sentiment data cast doubts on a quick economic recovery, pushing oil prices lower and causing inflation worries to ease.
Gold was at $943.30 an ounce at 1:40 a.m. EDT on Monday, down 0.3 percent from New York's notional close of $945.85.
It erased earlier gains that had lifted it as high as
$947.85.
U.S. gold futures for December delivery were down 0.4 percent at $945.2 an ounce.
"As per usual, the dollar seems like it's starting to strengthen again and gold's certainly taken a step back on that," Koh said.
"Near-term support for gold should come in around the $940s, and a break below those levels should see gold heading toward the $920-$930 regions," he said.
That level was last seen in late July, when gold prices dipped to a low of $925.10 on July 29.
U.S. crude oil futures slipped below $67 a barrel on Monday, extending the previous session's 4.3 percent decline as profit-taking continued following the release of the poor U.S. economic data.
The euro slipped 0.4 percent to $1.4142.
Japan's Nikkei average share average fell 3 percent. .T
The world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1,065.49 tonnes as of August 14, unchanged since August 11. Continued...
