SINGAPORE (Commodity Online) : Gold prices showed signs of recovery in Asian trade Monday as dollar eased while India’s surprise rate move still keep prices in check.

Gold for immediate delivery was seen trading at $1106.64 an ounce at 11.30 a.m Singapore time while April delivery was at $ 1107.39 an ounce at the same time.



Analysts said India’s surprise rate hike on Friday to tame inflation still holds gold prices in check as India is the world's largest buyer of gold.

The Reserve Bank of India increased the repo rate, the rate at which it lends to banks, to 5.00 percent and the reverse repo rate, the rate which it absorbs funds from the system, to 3.50 percent with immediate effect.

The dollar was steady versus the euro on Monday, having jumped on Friday on speculation that debt-laden Greece may have to turn to the International Monetary Fund for help, rather than its euro-zone neighbours, sending commodities sharply lower.

Markets were subdued with Japanese investors out for a national holiday.

On Friday, gold futures on the COMEX Division of the New York Mercantile Exchange dropped sharply.

The most active gold contract for April delivery declined $19.9 , or 1.8 percent, to finish at $1,107.6 .

Gold moves reversely against dollar for investors generally purchase the metal, priced in dollars, to hedge against declines in the U.S. currency.

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