LONDON, Nov 25: Gold extended its slide in London on Monday after COMEX profit-takers squared their positions ahead of a two-day holiday later this week in the United States.

Gold had begun to slip from Friday’s short-covering rally as the dollar reclaimed ground from the euro on Monday, and equities on both sides of the Atlantic climbed higher.

“The funds started selling it down on the (COMEX) open,” one London trader said.

Cheerier sentiment over the prospects for economic recovery in the United States sent the dollar to three-week highs against most major currencies, as the market expects this week’s macroeconomic data to indicate some firmness.

As a result, gold had the wind taken out of its sails.

“There’s some dealer selling, some fund selling — it’s been mixed, “ said a COMEX floor broker. “The market just moved so quickly because there wasn’t much there. There wasn’t any real support in the market holding it where we gained on Friday.”

Spot gold tipped back to $317.50/318.00 a troy ounce at 1545 GMT, down from $321.10/321.60 at the last close in New York on Friday.

“We’ve seen a bit of weakness in the euro against the dollar.

I think it will be generally quiet this week with the holiday in the States on Thursday and Friday for Thanksgiving,” another London trader said earlier.

Many markets in the United States will be closed on Thursday to mark the Thanksgiving holiday and COMEX will also be closed on Friday.

Traders reported little in the way of consumer business to support the market on Monday, although UN-led weapons inspections in Iraq, as well as renewed violence in the region of Kashmir on the Indian-Pakistani border, would deter any aggressive selling.

Gold will also be waiting for consumer confidence figures for November from the United States due out on Tuesday as well as quarterly GDP numbers.

Support for gold now lies closer to $315.00, while resistance at $325.00 remains intact, analysts said.—Reuters