Gold edged up in quiet trade on Monday on a dollar drop and a mixed bag of US and Chinese manufacturing data, while investors remained cautious due to uncertainty over the outcome of US budget talks. A record high in the physical bullion held by the world's largest gold exchange-traded fund SPDR Gold Trust underscored strong investment demand, and better Indian bullion buying suggested physical buying could underpin prices, analysts said.

Spot gold was up 0.1 percent at $1,716.71 an ounce by 3:24 pm EST (2024 GMT). Newly created longs lifted gold prices, traders said. Last week, gold dropped sharply after Wednesday's 1.3 percent decline due to a December-February contract rollover and worries that the US fiscal crisis might lead to a recession. US COMEX gold futures for February delivery settled up $8.40 at $1,721.10 an ounce. Silver rose 0.7 percent to $33.64 an ounce. Spot platinum edged up 0.1 percent to $1,601.80 an ounce, and palladium rose 1.4 percent to $686.80 an ounce.

Copyright Reuters, 2012