Gold fell to its lowest in almost a week on Monday, weighed by a rallying dollar that dented the metal’s appeal to non-U.S. investors and record speculative positioning in the New York gold futures market.

Spot gold stood at $1,000.40 an ounce by 1459 GMT, versus $1,006.15 an ounce late in New York on Friday. U.S. gold December gold futures fell $8.30 an ounce at $1,002.00 on the COMEX division of the New York Mercantile Exchange.

Prices earlier hit their lowest since Sept. 15 at $995.50, some way off the 18-month high struck last week at $1,023.85. However, gold has gained some 13.5 percent so far this year.

Data on Friday showed speculators held a record net long position in the U.S. gold futures market for the week ended Sept.15.

Analysts said concern was growing on the extent of speculative positioning — buying to profit if the price rises — in the market, as that left gold vulnerable to sharp corrections if currency fundamentals moved against it.

“The market is a bit wary of adding new longs after the highs of last week,” Standard Bank analyst Walter De Wet said.

“Given that the spec positions in all of these metals is really very high, without substantial dollar weakness we won’t move much higher,” he added.

Analysts also said selling pressure from the physical market had weighed on bullion, setting back the quest to strike record highs above $1,030.80 an ounce — the level hit in March 2008.

IMF GOLD

The dollar rose broadly, extending its pullback from a one-year low against the euro . On Friday, IMF member countries formally endorsed a plan for strictly limited sales of 403.3 tonnes of gold from its stockpile but said sales would be done in a way that did not disrupt gold markets.

“Central banks, including China’s, could acquire the gold at lower prices via the market. However, this is likely to be market-adverse on the whole, even if the sale takes place over several years and in a way that will not disrupt gold markets,” Commerzbank said in a research note.

On Monday, Market News International reported that China is considering buying gold being offered for sale by the International Monetary Fund, citing two unnamed government sources, but the report could not be confirmed and traders said it had little lasting impact on the market.

While concerns about speculative positioning remain, most analysts agreed that upside momentum was still intact, with long-term inflation fears still stalking investors.

“People are taking a bit of a breather ahead of the FOMC and G20, that’s all,” said Simon Weeks, director of precious metals sales at Bank of Nova Scotia.

The Federal Open Market Committee is likely to hold rates steady at the meeting, which starts on Tuesday but markets want to know if there are signs that the super-accommodative policy stance will be wound back, given a pick up in economic data.

The world’s largest gold-backed exchange-traded fund, the SPDR Gold Trust , said its holdings stood unchanged at 1,086.479 tonnes on Sept. 18.

In other metals, silver fell to $16.80 an ounce, in line with gold, compared with Friday’s $16.96.

Palladium stood at $294.50 an ounce versus $299.50 an ounce on Friday. It hit $304 an ounce last week, its highest since end-August 2008. Platinum fell to $1,312 an ounce compared with $1,327.

Sept 21 (Reuters)