Gold bullion prices hovered below $1,650 per ounce Monday morning in London – well within their range of the past four weeks – as European stocks edged higher while commodity prices fell.
The euro meantime sank to a two-month low against the dollar, as investors turned their attention to rising Spanish government borrowing costs.
On China's Shanghai Gold Exchange, contracts equivalent to around 7.3 tonnes of gold bullion changed hands in Monday's trading.
"Current levels are by no means excessively weak," says a note from investment bank UBS, "but the fact that average daily turnover sits at just about half of the 18 tonne all-time high seen last year is in itself confirmation that there is less gold fever in China this year versus last."
Authorities in Beijing meantime have widened the yuan's trading band against the dollar from a 0.5% maximum daily move to 1%.
Silver bullion fells to $31.22 per ounce – close to four month lows – before recovering some ground in Monday morning's London trading.
"The key downside risks for silver," says a note from Morgan Stanley, "are that the weaker economic outlook in 2012 and 2013 will cut fabrication demand, but not enough to take prices back to levels that would deter anticipated strong mine production growth and a rising surplus."
Sovereign debt stresses in the euro zone are expected to dominate this week's International Monetary Fund meeting, where European officials are expected to ask the IMF to expand its lending capacity to combat a fresh potential crisis, newswire Bloomberg reports.
At February's G20 meeting, European leaders were told Europe needed to do more before non-European nations would consider a bigger IMF contribution. There has since been agreement to increase the size of the Eurozone's 'firewall' to €800 billion, although only €500 billion will be available for fresh rescue programs.
"I think Europe has done its part," European Central Bank board member Joerg Asmussen told the Wall Street Journal over the weekend.
"Now you would expect other IMF shareholders to come forward and make their contributions to increasing IMF resources."
Benchmark yields on 10-Year Spanish government bonds rose above 6% Monday morning – a level breached last week for the first time since December.