SINGAPORE, May 26: Gold edged down on Monday after last week’s rally as oil prices resumed their march upwards and the US dollar steadied at near a one-month low.

Spot gold stood at $923.40/924.40 an ounce down from $925.20/926.60 in New York late last week, and off earlier offers at above $928 an ounce.

Bullion rose nearly 3 per cent last week when oil prices rose above $135 a barrel for the first time on record.

Oil demand has been far more resilient to higher prices than expected and prices continue to go higher. Gold is seeing a catch-up rally, pricing further expectation of rising oil, Mark Pervan, senior commodities analyst at ANZ, said.

Spot gold rose as high as $935.30 last Thursday, its highest level in a month on the day that oil prices rose above $135.00.

Gold could revisit the high $900s if oil maintains these kinds of levels and the dollar weakens, but the natural limit is $1,000 and we would struggle to get back through that level, Pervan added.

Oil rose above $133 a barrel on Monday, and was up 82 cents at $133.01 a barrel on new supply threats.

A supply outage on the Statfjord oilfield in the North Sea over the weekend added short-term concerns to longer-term worries that supply will struggle to keep up with demand over the next few years.

The weaker US dollar also added to gold’s appeal as analternative currency, with the greenback steadying at near one-month lows against a basket of major currencies on Monday on concerns that the record-high oil prices could further slow the US economy and add to inflation pressures.

The dollar index was little changed on the day at 72.030 up 0.08 per cent, and within sight of one-month lows of 71.823 struck last week.

Noncommercial investors in US gold futures turned bullish last week, hiking their long positions by around 20 per cent in the week to May 20, data from the US Commodity Futures Trading Commission showed on Friday.

Noncommercial investors, often referred to as speculators, were net long on 182,119 lots of gold on the New York Mercantile Exchange’s COMEX metals division, up from 152,938 lots a week earlier.

Gold futures for June delivery on the COMEX division of the New York Mercantile Exchange fell $0.80 to $925.00 an ounce.—Reuters