Gold gained 1.7 percent to a one-month high on Monday on technical buying after the US dollar slipped, but the precious metal is still down more than a fifth this year. Bullion's appeal as a hedge against inflation has been dented by expectations the US Federal Reserve will eventually pare back its bond-purchase programme. The Fed's three quantitative easing schemes have boosted gold and other commodities.
Gold climbed to as much as $1,322.50 an ounce, its highest since June 20, and stood at $1,317.74 by 0617 GMT. The metal is more than $600 below a lifetime high of $1,920.30 struck in 2011. "It broke through a key technical level, which is $1,300. That level has been tested a few times in the last one-and-half weeks. It's a lot of technical buying and high-frequency trading," said Joyce Liu, an investment analyst at Phillip Futures in Singapore. The most active June 2014 gold contract on TOCOM rose as high as 4,258 yen a gram, its highest since June 17, because of an initial drop in the yen and the Nikkei's gains. US gold rose 1.91 percent to $1,317.60 an ounce.
Gold prices in Shanghai were around $22 higher than cash gold. In other precious metals, silver tracked gold higher, platinum rose to its highest since June 19 and palladium jumped to its strongest in nearly six weeks. Hedge funds and money managers raised their bullish bets in gold and silver futures and options in the week to July 16, while they trimmed net shorts in copper, a report by the Commodity Futures Trading Commission showed on Friday.