Gold rose on Monday to its highest level in a month because of weakness in the dollar and a further decline in oil prices which sparked safe-haven bids for the precious metal. The dollar dipped after an unexpected fall in US wages tainted what was otherwise a robust report on the labour market. The data added to speculation the Federal Reserve would be patient in raising interest rates, which could help non-interest-bearing gold. Global oil prices are at their lowest level since April 2009.
"Normally, lower oil prices are a negative for gold, but prolonged oil price declines may be fanning concerns that further losses could have a dislocative impact on the financial markets and oil-exporting economies," HSBC analyst James Steel said. "This is creating safe-haven demand for gold." Spot gold climbed to $1,231 an ounce, its highest since December 11, and was trading up 0.4 percent at $1,227.20 at 0745 GMT. The metal gained about 1 percent on Friday, snapping a three-week decline.
Bullion was also getting some support from the physical markets, with buyers in top consumer China stocking up for the Lunar New Year holiday in February. Premiums on the Shanghai Gold Exchange were between $4 and $5 an ounce, steady around last week's levels.