SYDNEY, Apr 24 (Reuters) Gold took a rollercoaster ride on Monday as investors first lapped up bullion then sold out, sending prices down more than 2 percent to $623.50 a ounce.
A weak dollar first pulled more money into gold before easing oil prices took some of the worry out of inflation concerns, prompting a wave of bullion sales, dealers said.
''Gold was up, but just as quickly seemed to come off,'' one said.
A range of investment and private funds -- increasingly seeing gold as a hedge against the depreciation of the dollar, particularly as rising oil prices spell higher inflation -- have pushed prices up as much as 25 percent this year.
Gold raced has high as $639.00 on Monday versus versus $632 in late New York trade on Friday before dropping to an intraday low of $623.10. At 0518 GMT, spot gold cost $624.10/$624.90 an ounce.
''It's not the biggest of moves, but we are seeing some profit taking after gold opened higher here,'' Commonwealth Bank of Australia commodities analyst Tobin Gorin said.
''Gold opened at $638.75 in Sydney, building on a rise of 5.1 percent in price last week.
Lower oil prices wiped away some inflationary concerns, souring some investors to gold in the process, dealers said.
Merrill Lynch analyst Michael Jalonen said in a client note that in the short term the gold market should ''gain confidence by virtue of holding above the $600 an ounce level.'' Silver also slid after initially gaining about 17 cents, later trading at around $12.72/$12.82 an ounce versus $13.10 earlier.
Silver prices have soared as much as 50 percent this year, hitting $14.68 last Thursday on expectations an exchange-traded fund under review will boost demand, which has waned as jewellery and film photography is replaced with digital technology.
The metal is used in photographic paper and film. Up to 5,000 colour photos can be taken using an ounce of silver.
Barclays Global Investors, which plans to list the fund, is awaiting regulatory approval from the U.S. Securities and Exchange Commission.
Both metals gained in the final Comex session last week, when precious metals recovered some ground after a widespread sell-off the previous day as speculators seeking profits found prices too high to resist.
''At those levels, there was money to be made by selling,'' another dealer said.
Platinum dropped 17 to $1,105/$1,110 an ounce versus $1,125/1,130 in New York.
Palladium dropped $3 to $352/357.00.
REUTERS CS PM1501