Gold steady after piggybacking on oil gains

SINGAPORE (Reuters) - Gold was trading largely unchanged on Monday, after gaining $5 early in the day on the back of oil-led gains ahead of Hurricane Gustav, but volumes will likely remain low because of a U.S. holiday.

Platinum and silver shed early gains, while palladium dropped after hitting a two-week high last week on fund buying. Investors waited for the release of U.S. economic indicators, including Friday's non-farm payrolls.

Gold hit an intraday high of $835.25 an ounce before slipping to $830.50/831.50 an ounce, from $830.35/832.35 an ounce late in New York on Friday. U.S. markets were closed on Monday for Labour Day holiday.

"I guess with the United States on Labour Day today, markets are going to be a bit quieter. But I guess the focus for today and over the next few days will probably be on Hurricane Gustav and its after-effects," said Adrian Koh, an analyst at Phillip Futures.

"I think in the near-term, gold will still be looking at the $845 resistance and we will probably need a clear break above those regions before gold can head higher," he said.

Gold has bounced since tumbling to nine-month lows around $773 an ounce in mid-August but is still well below a record high of $1,030.80 struck in March.

"We saw a sharp decline in currencies and gold recently, and perhaps we are going to consolidate around those levels for a while before the market decides where to go next," said Koh.

"Frankly speaking, I think gold's going to consolidate around these levels. Probably around the $770-$900 ranges," he said.

Oil firmed almost $2 after U.S. energy companies raced to shut down offshore oil production and flood-prone refineries in the Gulf Coast ahead of Hurricane Gustav, which is evoking memories of 2005's Hurricane Katrina.