Gold rose 1 per cent overnight to briefly breach $US1,300 an ounce and remained at its highest in more than a week as the US dollar slipped and a recent equities rally paused.
Spot gold was up 0.5 per cent at $US1,297.84 per ounce after rising as much as 1 per cent to $US1,303.61 per ounce, its highest since March 28.
US gold futures settled 0.5 per cent higher at $US1,301.9 an ounce.
“There’s a little bit of easing risk appetite, the US dollar is weak and we saw Chinese central bank’s acquisition of gold for a fourth month. A combination of all these factors have moved gold into the $US1,300s,” said Bart Melek, head of commodity strategies at TD Securities in Toronto.
“There is significant support around the $US1,290 levels. We continue to see reasons for more gold positioning should volatility move higher.”
The markets are waiting for the minutes of the Federal Open Market Committee’s (FOMC) March policy meeting, due on Wednesday, for cues on the Fed’s future monetary policy stance.
“If the US Federal Reserve had discussed about rate cuts (in March), that should weaken the (US) dollar a little bit and help gold,” Melek added.
Meanwhile, China raised its gold reserves by 0.6 per cent to 60.62 million ounces by end-March, central bank data showed.
A rally in stocks, which had capped gold’s gains recently, paused, while the US dollar shed more than 0.3 per cent against a basket of currencies.
A weaker US dollar makes gold cheaper for holders of other currencies.
Data on Friday showed employment growth in the US accelerated from a 17-month low in March, assuaging fears of an abrupt slowdown in economic activity, but a moderation in wage gains supported the Fed’s decision to suspend further interest rate rises this year.
However, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell as much as three per cent in the previous week, its biggest weekly percentage decline since the end of November 2016.
Speculators slashed their bullish bets in COMEX gold in the week to April 2, data showed on Friday.
“Trader and investor attitudes are still generally upbeat, which is bullish for the world stock markets and still a bearish element for the safe-haven metals,” Jim Wyckoff, senior analyst with Kitco Metals, said in a note.
Spot platinum was up 1.6 per cent at $US909.25 per ounce, after touching its highest since May 2018 at $US914.74 earlier in the session.
“Some potential mining unrest in South Africa on wage negotiations is dragging on and has provided the fundamental backdrop,” said Saxo Bank analyst Ole Hansen.
Palladium rose 0.8 per cent to $US1,380.51 while silver gained 1.1 per cent to $US15.25 per ounce.