Spot gold edged higher on Monday to near its record, and market sentiment stayed buoyant on speculation of more quantitative easing in the United States as investors worry about the economic recovery. Spot gold edged up 0.4 percent to $1,281.15 an ounce by 0624 GMT, just below the all-time high of $1,282.75 hit on Friday.
US gold futures for December delivery rose 0.4 percent to $1,283.1 an ounce. Spot gold may retrace to $1,265 per ounce as a small five-wave cycle is seen over the Friday high of $1,282.75, according to Wang Tao, a Reuters market analyst. Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Trust rose 6.079 tonnes to 1,300.825 tonnes by September 17, the highest since the beginning of the month.
On the physical market, demand is expected to stay strong in the next few months, especially out of China, dealers said. Spot silver rose 0.6 percent to $20.89 an ounce, after reaching $20.99 on Friday, its highest in the past two-and-a-half years, with the March 2008 peak of $21.24 in sight. The world's largest silver-backed exchange-traded fund, the iShares Silver Trust, said its holdings rose to 9,381.74 tonnes by September 17 from 9,343.69 tonnes on September 16.