Gold gained on Monday after dropping by 1 percent last week as the dollar came off the previous session's highs, while rising tension in the Middle East and continued US discussions to resolve fiscal difficulties lent support. "The dollar is losing momentum for a further rally after Friday's positive news on the fiscal talks, which will support gold," said Li Ning, an analyst at Shanghai CIFCO Futures.
Spot gold rose 0.6 percent to $1,723.10 an ounce by 0735 GMT. US gold gained half a percent to $1,723.10. "If we go through the resistance at $1,726, we should see some short-covering and again test the 50-moving average this week," said a Singapore-based trader. The 50-day moving average stood at $1,741.
Spot silver rose 1.2 percent to $32.59, on course for its biggest daily rise in a week and half. Holdings of gold-backed exchange-traded funds rose to a record high of 75.421 million ounces on November 16, suggesting unabated investment interest. Speculators raised their net long bets in US gold in the week ended November 13 from the lowest level in about three months hit a week earlier, the US Commodity Futures Trading Commission said. Net long positions in US silver edged up to 27,802 contracts from 27,350 contracts a week earlier, their lowest since late August.