LONDON—The spot price of gold rose, but industry participants said the market's correction from record levels above $1,400 may be far from over.
Spot gold was recently up $6.20, or 0.5%, at $1,348.60 a troy ounce. The yellow metal is, however, still down 5% since the turn of the new year.
Traders said the mood in the market has improved after gold holdings in exchange-traded funds rose strongly at the end of last week. ETFs had been recording net declines since the beginning of the year as investor sentiment on gold turned.
Economist and trader Dennis Gartman said "much is being made" of the sizable inflows into gold ETFs, which saw holdings in the world's largest gold fund, SPDR Gold Trust, jump to 1,271 metric tons from 1,251 tons at the end of last week.
"However, do we believe that the correction has run its course and that suddenly the health of the gold market specifically and the precious metals' markets generally have been restored just because the sum of gold in [the Gold Trust] or the other ETFs has risen? No we do not, and we trust we are clear on this issue," he said.
Clive Lambert, director at technical analysis firm FuturesTechs, said while he expects prices to pull back further, testing the $1,326.70 area, "if we see gains through $1,352.70/oz and $1,358.20/oz the pressure will be lifted from the bulls and the bears' grip will not be so tight."
Among other metals, spot silver was off one cent at $27.52, while spot platinum traded down $4, or 0.2%, at $1,822 an ounce and spot palladium was off $7, or 0.9%, at $814 an ounce.
