NEW YORK--Gold futures were nearly flat on Monday, easing slightly as muted moves in currency markets left traders little direction after the market's big swings last week.

The most actively traded contract, for December delivery, recently traded down 30 cents at $1,609 a troy ounce on the Comex division of the New York Mercantile Exchange.

Gold traded in a wide range last week, moving between about $1,628 an ounce and $1,580 an ounce as investors reacted to European Central Bank and Federal Reserve policy meetings, as well as the latest, closely watched U.S. monthly employment report.

Futures fell 0.5% during the week as the central banks failed to implement new monetary easing policies that could weaken paper currencies and stoke gold investment.

Analysts with Morgan Stanley said persistent strength in the U.S. Dollar in particular "threatens to undermine the growth in gold investment demand."

Gold and the U.S. currency tend to move inversely, as some investors seek the metal as a hedge against declines in the dollar, and a stronger dollar makes gold investment more expensive for buyers using other currencies.

The euro was recently at $1.2399, up from $1.2385 in New York trading on Friday afternoon.

The dollar has climbed against currencies of some major U.S. trading partners this year, as investors sought the perceived safety of U.S. government debt amid Europe's debt crisis and the Federal Reserve refrained from implementing further monetary easing that could weaken the currency.

That's put pressure on gold, analysts say. Futures climbed near $1,800 a troy ounce in February before retreating on a lack of Federal Reserve stimulus. Through Friday, gold was up about 2% in 2012.

The latest disappointment to gold bulls came last week, as the Fed stood pat on its previously announced policies instead of announcing new measures. Signs of weakening U.S. economic growth had spurred speculation that the central bank would announce new measures, potentially weakening the dollar and lifting gold.

Barclays analysts Suki Cooper and Lynnden Branigan said in a note that they "put probability of QE3 at roughly one in three," referring to a third round of Fed bond buying, or quantitative easing. "Thus, gold may struggle to gain traction."

Write to Matt Day at matt.day@dowjones.com

(END) Dow Jones Newswires

08-06-12 1018ET

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