NEW YORK ( TheStreet ) -- Gold prices closed slightly lower Monday as a stronger U.S. dollar and profit taking weighed on the metal.
A weaker euro was also propping up the dollar as Greece rebelled against any European government oversight into how it runs its budget and austerity measures. Also, the yield on 10-year Portuguese bonds rose to more than 15%, igniting worries of another bailout. European Union leaders were also embarking on another EU summit today to discuss fiscal consolidation and the possibility of letting the current bailout fund, EFSF, and the permanent bailout fund, ESM, operate together, a move which Germany opposes. Italy also raised 5.57 billion euros for 5-10 years at lower yields but to relatively tepid demand. The gold market was also slightly disappointed that the People's Bank of China didn't take any steps to loosen monetary policy by lowering the amount of money banks have to hold in their reserves. However, after strong investor inflows last week, some kind of pause is normal. "We are cautious of overstretched daily studies," says Barclays Capital, but "the absence of topping signals compels us to stick with the uptrend." Barclays thinks gold could rally towards the $1,760 area with the next target of $1,800. "Any pullback is expected to find buying interest near $1,645." Stan Dash, vice president of applied technical analysis at TradeStation, says today's trading was not quite a stall. "You've got resistance at $1,767-$1,770 and support at $1,715-$1,718." Dash says if gold does start to stall, prices could consolidate more and gold might sink as low as $1,670 before bouncing higher. "That would not be a breakdown of the trend but a consolidation." Dash sees that kind of move happening between the next 5-10 sessions. Gold is currently seeing strong investors flows. The SPDR Gold Shares (GLD) added 16 tons last week. Speculative long positions on the Comex increased by 6,100 contracts while short positions only dropped by 88, which means gold's strength didn't come from technical short covering. "The data show investors are rebuilding long positions across the precious metals complex," says James Steel, analyst at HSBC. "We expect this to continue with a commensurately bullish impact on bullion prices." Gold mining stocks were lower Monday. Kinross Gold (KGC - Get Report) was down 2.14% at $11.41 while Yamana Gold (AUY - Get Report) was relatively flat at $17.30. Other gold stocks, Agnico-Eagle (AEM - Get Report) and Eldorado Gold (EGO - Get Report) were lower at $37.85 and $14.94, respectively. -- Written by Alix Steel in New York. >To contact the writer of this article, click here: Alix Steel.