News from Singapore, on Monday, gold prices neared its highest level in two weeks, but gains may stop at a certain level depending on the performance of equity markets. Promising US jobs data damped speculation in the Federal Reserve may increase monetary stimulus.
This bullion has dropped around 12% until now. As investors tend to buy precious metal to hedge against inflation that is caused by the easy monetary policy.
Gold prices increased by &7.05 an ounce to $1477.25 at 6.24 a.m. GMT, as a result of a stronger euro. It hits its highest since April 15 of $1487.80 on Friday. Buying rally by a cut in interest rates by the European Central Bank (ECB) and the Fed will stay with its stimulus program.
Spot gold increased by 0.2% to reach $1,473.66 an ounce at 0915 GMT, while U.S. gold futures for June delivery were up $8.90 an ounce at $1,473.10. Trading is expected to be slow in Europe, with London closed for a national holiday.
On Friday, a report by the CFTC showed, hedge funds and money managers raised their bullish bets in gold futures, as the precious metal improved 4.5% during the period.
In Asia, on Monday, stocks increased due to the increase in U.S. jobs. The physical buying rose due to concerns that the gold prices may increase. Growth in physical buying in Asia and other parts of the world drives gold prices from recent lows, leading to a lack of gold bars, coins and nuggets in Hong Kong, Singapore and Tokyo.