Gold ends up, lifted by oil surge, dollar drift

NEW YORK (Reuters) - U.S. gold futures held onto strong gains into the close on Monday, after being lifted to a one-month high as fund and speculative buyers reacted to a drifting dollar and surging oil prices, traders said.
"The market was very quiet and very thin. But metals were up across the board. The dollar was weak and oil was up quite a bit and that supported it right from the get-go, but it was on light volume," said one New York gold dealer.
Most-active gold for August delivery on the COMEX division of the New York Mercantile Exchange settled with $7.70 gains at $662.50 an ounce. It set a higher range from $657.80 and $666.0 an ounce, a level last seen on June 7.
At its session top, August gold reached higher than in three prior attempts to break resistance at $666.0 an ounce. But some traders noted that its retreat from that level in a thin market may leave in doubt its resilience at that level.
A languishing dollar, however, offered gold bulls a reason to buy, especially in the face of surging oil prices.
The dollar traded mostly flat on Monday in a quiet session. Sentiment for the dollar has been dampened by expectations that the Federal Reserve will keep interest rates unchanged this year even as other central banks tighten monetary policy.
Analysts said even Friday's surprisingly robust U.S. jobs report was not enough to reverse the recent trend of narrowing interest rate differentials between the dollar and major European currencies, eroding demand for the greenback.
A weaker dollar often helps dollar-denominated assets like gold that trade in overseas markets.