LONDON (Reuters) – Gold prices rose to their highest in almost three weeks on Monday, setting the market on course towards $1,300 an ounce, drawing confidence from continued ultra-low interest rates.
Weak economic data and uncertainty over U.S. monetary policy has contributed to risk aversion, boosting investor appetite for bullion and other assets perceived as safer stores of value, including the Japanese yen.
Spot gold hit $1,254.06 an ounce in early trade, its highest since March 22, before retreating slightly to $1,253.40 at 1347 GMT, up 1 percent. “Very loose monetary policy pursued by several central banks should point to even higher gold prices,” Commerzbank analyst Daniel Briesemann said.
“The ECB also increased its bond-buying purchases and has not ruled out further measures.”
Briesemann noted gold’s progress in euro terms, approaching the 1,100 euro mark. Strong gains in the precious metal’s value across different currency denominations is an indicator of broad market strength.
Scaled-back expectations for further monetary tightening this year helped gold to its best quarter in nearly 30 years in the three months to March.
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