Capital Gold Group Report: Gold Resumes Upward March as Dollar Falls Sharply

Gold for April delivery gained $8.20 to stand at $926.90 an ounce on the New York Mercantile Exchange.

"Some investors and speculators feel that the sell-off is overdone and the metal may have become oversold in the short term," said Mark O'Byrne, executive director at Gold & Silver Investments Ltd.

"While there may be further consolidation at these levels, gold will likely resume its upward march sooner than expected," he said in a research note.

On Monday, gold futures fell $1.30 an ounce in a volatile session. Last week, the precious metal tumbled more than 8%.

"Gold is still holding well below last week's highs as market jitters have subsided and some safe-have trading has been unwound," said analysts at Action Economics.

In currencies, the dollar lost ground against its major foreign-exchange rivals as fears about the U.S. economy lingered. Weakness in the greenback typically benefits dollar-denominated commodities.

The dollar index, which tracks the U.S. currency against a basket of other major currencies, fell 0.8% to 72.32.

In economic news, U.S. home prices in 20 major cities declined a record 2.4% in January, falling for the 18th month in a row, bringing prices down a record 10.7% in the past year. According to the Case-Shiller home price index released by Standard & Poor's, prices were down in all 20 cities compared with December.

Also on Nymex, silver for May delivery rose 2.3% to $17.51 an ounce, April platinum increased 3% to $1,946 an ounce and June palladium added 2.4% to $447 an ounce. May copper futures also gained, adding 2% to $3.69 a pound.

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