Gold rose to its highest in more than a week on Monday as the dollar weakened and the euro powered ahead after the head of the European Central Bank refrained from talking down the single currency at a high-profile meeting of central bankers.
At the meeting in Jackson Hole in the United States, the ECB's Mario Draghi said the bank's ultra-loose monetary policy was working and that the euro zone's economic recovery has taken hold, refraining from commenting on the euro's recent strength. That was enough to push the euro to its highest in more than 2-1/2 years against the U.S. dollar while the dollar index fell to its lowest since May 2016, lifting gold prices.
"Draghi did not refer to the strong euro being a break on policy normalisation -- this is what it triggered the rally in the euro and the price reaction in gold mirrors what the currencies did," said Julius Baer analyst Carsten Menke.
Spot gold rose 1.42 percent to $1,309.41 an ounce.
U.S. gold futures settled up 1.3 percent at $1,315.30.