Gold prices climbed 1% on Monday to hit the highest in more than a month, as investors took refuge in the safe-haven metal after an uptick in coronavirus cases roiled hopes for a quick economic recovery.
Spot gold was up 1% at $1,760.55 per ounce. The session high was 1,762.84, highest since May 18. Prices were $4 shy of a 7-1/2 year high of $1,764.55, hit last month.
U.S. gold futures was also 1.3% higher at $1,776.
"There is some flight to safety in gold," said Bob Haberkorn, senior market strategist at RJO Futures. "Rise in coronavirus cases globally have led gold to break the $1,750 level. If we close above $1,765 today, the $1,800 level is not very far."
Gold, a safe haven during times of economic uncertainty, got a boost after the World Health Organization on Sunday reported a record jump in global infections, with the biggest increases in North and South America.
Two U.S. Federal Reserve officials on Friday warned the unemployment rate could rise again if the disease is not brought under control. Central bank across the globe have taken aggressive stimulus measures and kept interest rates low during the pandemic.
"There seems to be some increase in inflation expectations which is pushing real rates lower and giving some support to the gold price," said UBS analyst Giovanni Staunovo.
Lower interest rates reduces the opportunity cost of holding non-yielding bullion. The dollar index was down 0.5% at 97.15, making gold cheaper for holders of other currencies.
Meanwhile, SPDR Gold Trust holdings on Friday rose 2% to 1,159.31 tonnes, the highest level since April 2013.
Silver rose 2.1% to $17.97 per ounce, after hitting a more than one week high at $18.01.
Palladium was up 1.1% at$1,932.22, while platinum gained 2.7% to $827.58, hitting more than a week high at $833.67.