On June 26, gold held steady above $1,580 an ounce after the precious metal rose in the previous session on growing uncertainty on whether a key European Union summit would be able of resolving the debt crisis of the region.
"If the U.S. dollar remains strong, then gold may easily move down a little bit. We have to see if people are losing confidence in gold. One thing is for sure, the world's economy is slumping," said Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong. "Sentiment in general is a bit mixed. If you have less money in your pocket, why should you buy gold? The only thing that people are buying for the time being is the U.S. dollar."
U.S. gold for August delivery fell $3.70 an ounce to $1,584.70 and gold hardly changed at $1,584.10 an ounce by 0546 GMT.
"Silver outperformed the rest of precious metals' complex after the gold to silver ratio rose close to 60 last week, the highest level in almost two years," Deutsche Bank said in a note.
"We believe that silver represents attractive value if the gold to silver ratio is around or above 60."
"We still see light buying, but it's not necessarily coming from a specific area such as Thailand," said a dealer in Singapore. "We expect Indonesia to buy more before Ramadan," said the dealer, referring the Muslim fasting month that starts in July.