[LONDON] Gold rose to a fresh 15-month high on Monday above US$1,300 an ounce, supported by renewed weakness in the dollar, but action was muted because of a holiday in some markets.
Many Asian markets and London were closed for national holidays, dampening momentum in the precious metal, which posted its biggest weekly rally since early February last week, up more than 5 per cent.
That was chiefly driven by weakness in the dollar, which had its worst week since 2008 versus the Japanese yen after the Bank of Japan unexpectedly opted against further monetary easing. The US currency stayed on the back foot on Monday.
Spot gold was up 0.5 per cent at US$1,299.71 an ounce at 1135 GMT, off an earlier peak of US$1,302.10, its highest since January last year. US gold futures for June delivery were up US$12.10 an ounce at US$1,302.60.
"The dollar was the reason behind the spike up (last week), and we broke all the important levels on the upside," Afshin Nabavi, head of trading at MKS said. "US$1,285 was a huge number, and we got through US$1,290 pretty easily. $1,300 is going to be a very important one."
"The dollar is very weak, especially against the yen, and the white metals all look very healthy, so maybe on the back of that gold may get a bit of a follow through," he said. "I think we're heading for new numbers on the upside."
European shares were up 0.2 per cent, while the dollar index , which measures the dollar against a basket of currencies, fell for a sixth session to hit an eight-month low.
Data on Friday showed hedge funds and money managers cut their net long position in gold futures and options in the week to last Tuesday.
"Even though net long positions in gold were reduced slightly in the week to 26 April, we believe that speculative financial investors have been driving the gold price up significantly of late," Commerzbank said in a note. "The same also applies to silver, platinum and palladium." Speculators added to their bullish stance in COMEX silver for the third straight week, taking it to a record high.
Silver was up 0.6 per cent at US$17.91 an ounce. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, steadied at 72.7, off last week's 6-1/2-month low of 72.2.
Platinum was up 0.6 per cent at US$1,081 an ounce, while palladium was up 0.3 per cent at US$626.50 an ounce.