LONDON: Gold held below a two-week high, falling as the dollar strengthened after data showed Japan had slipped into recession, but lower global shares kept losses in check on concerns about global growth.

Spot gold was down 0.4 percent at $1,183.55 an ounce by 1514 GMT after peaking at $1,193.95, the highest since Oct. 31.

The metal jumped 2.3 percent on Friday, moving above the technical level of $1,180 as short-covering, fund buying and a sudden weakening of the dollar offset better-than-expected US data.

The metal had fallen to a 4-1/2-year low of $1,131.85 an ounce on Nov. 7, due to multi-year highs in the dollar.

“Today gold is holding up pretty well even though the dollar has managed to strengthen,” SaxoBank senior manager Ole Hansen said.

“The overriding view though is still that the dollar will go higher, inflation will stay low and that makes the rallies we see in gold good selling opportunities.”

The dollar was up 0.4 percent against a basket of currencies, mostly helped by a seven-year low in the yen.

The way higher may not be easy for bullion as the factors that brought down gold in the last few weeks have not gone away.

The dollar remains in favor as US data has been pointing toward economic recovery, and oil prices continue to fall.

Gold is usually seen as a hedge against oil-led inflation.

Economic optimism could dent the appeal of gold by pushing investors toward riskier assets such as equities. A robust economy also could prompt the US Federal Reserve soon to raise interest rates, hurting non-interest-bearing gold.

Bearish sentiment among investors prevailed. Speculators in gold futures and options slashed their long bets for a third straight week, according to the US Commodity Futures Trading Commission.

Hedge fund Paulson & Co. maintained its stake in the world’s biggest gold-backed exchange-traded fund, SPDR Gold Trust GLD, in the third quarter, but investor George Soros has sharply cut his stake in Barrick Gold Corp. and several gold mining company ETFs.

Among other precious metals, platinum 1.1 percent to $1,199.70 an ounce, while palladium rose 0.9 percent to $765.90 an ounce. Silver was down 1.3 percent at $16.03 an ounce.