Spot gold had gained slightly by this afternoon as investors bought the yellow metal on the back of a big drop in the spot price last week.

"Bullion’s jump this morning has come on the back of bargain hunting, as the market sees value at lower levels following days of declines, said the daily economic comment note from Nedbank Capital.

CPI figures also came out last week from the US hinting at a pause in the country’s interest rates this week and eroding gold’s demand as an inflation hedge, according to the note.

James Moore of TheBullionDesk.com told AFX that gold could test its low levels of a few months back.

"The current theme of long liquidation is likely to see gold continue lower and could look to test the $542,50/oz low from June," he said.

On Wednesday the US Federal Reserve will announce its interest rate decision and today the country’s current account figure for the second quarter is expected.

In afternoon trade, gold was quoted at $581,55/oz from Friday’s close of $579,30/oz. The euro was quoted at $1,2660 from $1,2637 on Wednesday.

Oil prices and dollar strength have pushed the gold price down from just below $640/oz two weeks ago. The oil price has fallen from over $70 a barrel to $63,57 a barrel this afternoon.

Platinum was up $4 at $1,160,50/oz, and palladium was down $1,50 at $309/oz