Gold inches up after weekly drop

Gold edged up on Monday after falling more than 3% last week, but interest in the precious metal could be limited by a steady U.S. dollar and deflation worries stemming from a global economic slowdown.

Inflation fears have helped fuel several years of strong gains for gold, but investors are now starting to worry about deflation after recent reports showed signs of slowing global economic activity, already dented by the debt crisis in Europe.

Bullion has shed most of its early gains and is trading almost flat for the year. Gold added USD 1.05 an ounce USD 1,572.49 an ounce by 0313 GMT after an early drop to around USD 1,567 spurred bargain buying from speculators. [ News Source ]

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