Gold regained strength today as bargain hunters resurfaced after prices dropped slightly in the previous session, while demand from investors was likely to offset gains in the US dollar.
Recent poor data from the United States pointed to a faltering economy, and some investors also ditched the euro on worries of more economic weakness ahead in the euro zone.
Gold added $US1.65 to $US1228.60 an ounce, having hit an intraday high of $US1229.65. Bullion had rallied to $US1237.15 last Thursday, its strongest since early July, after new US jobless claims hit a nine-month high.
"I would still be thinking that investment is pretty positive for gold, especially if worries about the economic recovery continue," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.
"If we can see a base forming at the $US1220 level, then I think gold will be well-poised to continue its upward trend. A low interest rate environment will continue to benefit gold," said Ong, referring to the Federal Reserve's pledge to keep short-term interest rates near zero.
US gold futures for December delivery rose $US1.30 to $US1230.10 an ounce after settling $US6.60 lower on Friday.
Cash gold and US futures powered to a lifetime high in June on worries the euro debt crisis and the US economy was slowing, but attempts to revisit this year's peak were met by profit taking.
Reuters