Gold settles above $1,330, near 3-week high
Gold rose nearly 2 percent on Monday, hitting its highest in nearly three weeks as strong Chinese gold consumption and an inflow to gold-backed exchange-traded funds fuelled hopes of resurgent physical and investment buying.
Silver soared more than 4 percent to a near two-month high on gold's coattails, while recent strong U.S. and Chinese economic activities prompted some investors to buy silver as an industrial play.
The yellow metal extended its winning streak to a fourth consecutive session after Chinese trade data showed the country's gold demand surged year-over-year in the first six months.
"Gold is rallying on indications of some physical demand in the market," said Bill O'Neill, partner of commodities investment firm LOGIC Advisors. "But the ETF holdings increase has to be sustained to indicate it is the start of a new trend," O'Neill said.
Holdings in the world's largest gold ETF SPDR Gold Trust grew by nearly 2 tonnes to 911.13 tonnes on Friday - the first increase since June 10. The fund has seen more than 435 tonnes in outflows this year, about $19 billion at current prices.
Spot gold rose 1.7 percent to $1,336.24 an ounce, having earlier traded as much as 2.2 percent higher at $1,343.06, its highest since July 24.
U.S. gold futures for December settled up $22 at $1,334.20 an ounce, with trading volume about 30 percent below its 30-day average, preliminary Reuters data showed.
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