SINGAPORE (Commodity Online) : Gold prices rose marginally in Asian trade Monday despite a recovering dollar as the market digested news that European central banks have extended an agreement limiting gold sales.

Spot gold was seen trading at $954.80 per ounce at 12 noon Singapore time, unchanged from Friday’s notional close in New York.

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US gold futures for December delivery were at $US956.8 per ounce, down 0.3 per cent.

Noncommercial net long US gold futures positions rose 12 per cent to 193,514 lots in the week to August 4 from 172,771 lots, a weekly report by the US Commodity Futures Trading Commission showed.

Last week the precious metal retreated from a two-month high when the dollar rallied on renewed hopes for an improvement in the economy.

Bullion drew support from news that a group of central banks in Europe had renewed the Central Bank Gold Agreement (CBGA), a pact to limit gold sales for a five-year period to 400 tones a year from 500 tones.

Meanwhile, the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holdings stood at 1068.90 tones as of August 7, down 3.97 tones or 0.4 per cent from the previous business day.

Analysts said, holdings in the trust, which issues securities backed by physical stocks of gold, have been declining due to fading worries about inflation, which has sapped investors' appetite for bullion as a hedge.