Gold prices reduced after a 7 percent drop last week in connection with the strengthening of the dollar and the Fed's plan to reduce the incentive program.

Gold fell by 24 per cent since the beginning of the year, partly due to the Fed's plans to reduce the volume of buying up bonds this year from the current $ 85 billion a month. Also on the market affects the sharp rise in interest rates on short-term loans in China last week.

Stocks of the world's largest exchange-traded fund backed by gold (ETF) SPDR Gold Trust on Friday fell by 0.54 percent to 989.94 tonnes - the lowest level in more than four years.

Physical demand in India - the world's largest consumer of gold - also dropped due to the weakening rupee and increase the import duty on precious metals.

Pressure on the price of gold has had a decrease in the growth forecasts of prices for precious metals analysts Goldman Sachs and Credit Suisse.

The main reason for the revision of the forecast Goldman Sachs was the improvement in the U.S. economy, which increases the risk of falling gold prices. By the end of this year, Goldman Sachs expects the price of gold at $ 1,300 an ounce, down 9.4% compared with the previous forecast. Thus by 2014, the price drops to $ 1,050 per troy ounce, down 17.3% from the previous forecast.

The cost of the August gold futures on COMEX today dropped to 1277.20 dollars an ounce.